A big round of USDA reports this week ignited the grain markets.
July corn prices were up 60.75¢, while December corn prices were up 60.50¢, for the week ending July 2. July soybean prices were up $1.22, while November soybean prices were up $1.29. July wheat prices were up 8.75¢, and Minneapolis wheat prices were up 30.75¢.
On June 30, USDA released the following numbers in its annual Acreage report:
- Corn: 92.7 million acres, up 2% or 1.87 million acres from 2020.
- Soybeans: 87.6 million acres, up 5% from 2020.
- All Wheat: 46.7 million acres, up 5% from 2020.
- All Cotton: 11.7 million acres, down 3% from 2020.
Ahead of the report, analysts surveyed by Reuters expected corn plantings to rise notably from March intentions to around 93.787 million acres with soybean plantings climbing to 88.955 million acres. Wheat plantings were expected around 45.940 million acres. Cotton plantings were expected at 11.856 million acres.
“Shocking would be the best word to describe the report,” says Jerry Gulke, president of the Gulke Group. “Our guesses were right with the average guess by traders. We did get an increase in corn, but not what we were expecting.”
Gulke says this report was just as surprising as the March 31 Planting Intentions report.
“Whether we like the report or not, we have to deal with it,” he says. “It won’t change until January of next year. With the Acreage report out of the way, it’s really up to weather.”
Gulke has spent the last week traveling through Illinois, Wisconsin, Minnesota and North Dakota.
“I was shocked at just how green the corn was, and it was short,” he says. “The soybeans in North Dakota were probably the worst crop I’ve ever seen in my lifetime. They are short and in places they just didn’t germinate. It’s not bad all over, but generally speaking it’s really disheartening.”
By the time the trade picks up again on July 6, Gulke says there could be more fireworks, or it could have rained everywhere and we solve this dryness problem.
“Now things are critical with these acres,” he says. “You can’t afford a yield drop of very many bushels that still be able to balance out the supply and demand.”
Read More
USDA Reports Reveal Zero Margin for Error for Corn, Soybean Production
Market Surprise: Lower-Than-Expected Planted Acres Send Prices Higher
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Jerry Gulke farms in Illinois and North Dakota. He is president of Gulke Group. Disclaimer: There is substantial risk of loss in trading futures or options, and each investor and trader must consider whether this is a suitable investment. There is no guarantee the advice we give will result in profitable trades. Past performance is not indicative of future results.
