For the week, December corn lost 11 cents, November soybeans plunged another 33¾ cents, December soybean meal gained 50¢ per short ton and December soybean oil fell 151 points. December soft red winter wheat was down 26¼ cents, December hard red winter wheat lost 23¾ and December hard red spring wheat dropped 27¼ cents.
Despite strong demand and export news this week, grains markets ended lower on Friday and were down for the week.
Jerry Gulke, president of The Gulke Group, was encouraged by the strong weekly exports, especially for corn and soybeans, and flash export sales of corn to Mexico and soybeans to China.
Weekly export sales on corn were the biggest since March 16, 2023, at 87.6 million bushels, while weekly soybean exports totaled 62.6 million.
However, he says the market viewed the activity as routine business. Top export customers, such as Mexico and China, usually makes purchases around harvest, though this year trails last year as well as the past three years.
Corn is an attractive buy for end users at $4, and soybeans under $10 are also a good value, so demand has been steadily improving.
However, Gulke says the demand is still not good enough to chew through a 550-million-bushel U.S. soybean carryout or a 2-billion-bushel corn carryout.
He thinks corn and soybean prices might have to go lower to find more end-user buying.
“There’s a certain amount we have to get rid of to get ending stocks lower than what they’re currently projected, and that might take a while. The bottom line is the function of the market — when you have too much, you become the cheapest seller, not necessarily the cheapest producer,” he explains.
Gulke says the hard reality is the market doesn’t care if producers make money on their crop.
The soybean market has already taken out risk premium as rains have started to fall in South America. Gulke says the supply problem will only become worse if their record crops are confirmed.
Technically, he says the soybean market got beat up on Friday and the charts look terrible, leaving the contract low of $9.55 vulnerable.
December corn is still holding above $4, but he is watching the $3.97 level and says if the market trades below that point and goes into the gap area on the charts it will likely test the contract low.
Unfortunately, U.S. farmers are storing billions of bushels hoping for better prices, which might add insult to injury.
For more information, contact Jerry at info@gulkegroup.com.
