For the week, December corn lost 9 cents, November soybeans plunged 32¼ cents, December soybean meal dropped $15.40 per short ton and December soybean oil fell 64 points. December soft red winter wheat gained 9¼ cents, December hard red winter wheat was up 6½ cents and hard red spring wheat tacked on 5¼ cents.
The October WASDE effectively solidified the supply side of the U.S. corn and soybean balance sheets for the 2024-25 marketing year.
Jerry Gulke, president of The Gulke Group, says the fact USDA didn’t raise yields on corn or soybeans was a surprise for him because he has never seen yields this good on his own farm.
“I thought USDA could raise corn yield one to 1.5 bu. per acre and a half to 1 bu. on soybeans based on the results on our farm and the harvest reports we’ve been getting from farmers. Many have told us their yields are better than expected, even in areas that faced replant, flooding and excess rain early in the growing season,” he explains.
Regardless, Gulke says USDA is unlikely to make many adjustments in future reports and even 1 bu. one way or another will not make a big difference in U.S. corn or soybean production.
Farmers are quickly harvesting this year’s crop thanks to dry weather across the Corn Belt, so Gulke says they know their crop size.
What could still change, according to Gulke, is the demand for corn or soybeans, which is somewhat weather and price dependent.
Currently, corn demand has been steadily improving and USDA raised total corn usage another 25 million bushels in the report to 14.99 billion bushels.
The market continues to grind through supply to push ending stocks just below 2 billion bushels. While that isn’t wildly bullish, Gulke thinks corn has a better story than soybeans.
Gulke was encouraged by a flash sale of 22.8 million bushels of corn on Friday to an unknown destination and the fact USDA raised corn exports slightly to 2.325 billion bushels in the WASDE report.
“We’re doing this all without the help of China,” he adds.
He says soybean exports are still behind past years at 1.85 billion bushels, and ending stocks are large at 550 million bushels.
If the forecasted rains start to fall in South America, Gulke thinks that will make soybean prices vulnerable to downside pressure.
“The crop is getting planted late in Brazil, but not that late, and the 6-to-10-day forecast has rain almost every day,” he says.
Plus, USDA is projecting Brazil will produce a record soybean crop at 169 million metric tons, which could flood the market.
Gulke recommends storing unhedged bushels on the farm and taking advantage of the carry in the market or higher prices in deferred futures contracts in the grains.
For more information, contact Jerry at info@gulkegroup.com.
