For the week September corn was up 1 cent, December corn was down ¼, September soybeans surged 54 ½, November soybeans soared 55 cents, December soybean meal gained $9.30, December bean oil was 70-points higher, December soft red winter wheat lost 8, December hard red winter wheat lost 8 ¾ and December hard red spring wheat down 8.
Corn closed nearly steady for the week, which was a victory considering how bearish USDA supply projections were in the August WASDE.
Corn Yield Surprised Gulke
Jerry Gulke, president of the Gulke Group, says he was as surprised with USDA’s 188.8 bushel per corn acre yield as anyone, but he thought the market handled the news remarkably well.
“I was pretty shocked at the at the yield number. I didn’t think that would be there.We did our own survey and I wouldn’t print what we found. We found this unbelievable amount acres and corn and we trimmed it back to little.As it turned out we were very close to what the USDA finally found out,” he says.
Corn Acres Also in Question
Gulke says the additional 2 million corn acres USDA reported was also a surprise and a head scratcher.
The accuracy of the figures would have been easier to dispute if the agency had not used the certified acres from the Farm Service Agency (FSA) as well as data from the National Agricultural Statistics Service (NASS).
With technology FSA can now provide the acreage data in August, yet it still leaves doubts about this government data according to Gulke.
Corn Demand the Biggest Surprise in the WASDE
Gulke thinks the corn market absorbed the record yield and acreage data because the USDA also raised demand by 545 million bushels and pushed usage to a record 16 billion bushels.
To him that was the biggest surprise in the WASDE.
“You know, I’ve talked about that for months, that if the tariff thing really works the end result will be expanded markets and demand.USDA said we’re not going to assume anything on tariffs good or bad unless we see some proof.Well, all of the sudden they increase demand with very strong exports and higher feed and residual.I mean figure that one out,” he says.
That tells him that USDA is starting to include some of the added export demand from recent and upcoming trade frameworks in their projections.
However, he remains skeptical, “So are we saying now that there’s enough evidence out there by the deals that have been done that it looks like a lot of little countries or medium sized countries are going to buy some from us. My opinion is that the pie is only so big in the world.”
Strong Technical Performance in Corn
Gulke says December corn made new contract lows on report day hitting a low of $3.92 and essentially retested the 2024 low nearly $3.85.
However, in the process it filled a gap area on the charts and then closed above that level.which may have confirmed an early harvest low.
“We filled the gap that I said had to hold and it held.Then on a weekly basis closed nearly unchanged for the week like you said. Holy mackerel, for me this is an awful bullish response,” he explains.
Is 188.8 Bushels the Biggest Corn Yield?
Whether or not the low is retested will depend on whether or not the crop gets bigger in the September report keeping in mind the old adage that “big crops get bigger.”
Conversely, without field surveys the August report Gulke says USDA may have overstated the yield and some of the problems that are being seen including pollination issues, tip back and disease pressure.
“I have doubts about the 188 bushel yield,” he exclaimed.
In fact, Gulke says it is more likely that the soybean yield can achieve the record 53.6 bushel per acre average than the corn making 188.8 bushels per acre.
“Just because the corn may have gotten hurt when it first got started out and so forth and it got too much water in Iowa not enough in Illinois. And now farmers are going into their field to scout and finding pollination issues in the corn from high night time temperatures and other problems that may trim yield,” he says.
However, he says the problem is it may take until January to find out.
For more market information you can contact Jerry at info@gulkegroup.com.
