For the week, December corn lost a half cent, November soybeans were down 21¼, December soybean meal was $4.20 lower and December soybean oil was down 348 points. December Chicago wheat was 39 cents lower, December Kansas City wheat lost 48¼ cents and Minneapolis wheat lost 62 cents.
USDA released their quarterly grain stocks report on Friday. Old crop corn stocks in all positions on Sept. 1, 2023, totaled 1.36 billion bushels, down 1% from Sept. 1, 2022. This number came in 69 million bushels below estimates and 90 million bushels below the agency’s final ending stocks figure. Old crop soybean stocks in all positions for soybeans was pegged at 268 million bushels, which was above expectations and final ending stocks for 2022-23 of 250 million bushels.
However, Jerry Gulke, president of the Gulke Group, says the most significant part of the report to him was the breakdown of who is holding the grain. Of the total corn stocks, 605 million bushels are stored on farms, up 19% from a year earlier. Off-farm stocks, at 756 million bushels, are down 13% from a year ago. Soybean stocks stored on farms totaled 72 million bushels, up 14% from a year ago. Off-farm stocks, at 196 million bushels, are down 7% from last September.
Gulke says it’s interesting to him the number of farmers who have grain in the bin after the chance to sell $17 soybeans and $7 corn in many places where the basis was good.
“If they’re still holding grain you have to wonder if they need the money and whether they have a lot more staying power, holding grain off the market longer than the market anticipates,” Gulke says.
Farmers have built a lot of storage, and Gulke says that has been a nemesis for grain merchandisers because the farmer can tuck the crop away from the market.
“The question then becomes will we flood the market with grain by the end of October. Then they’re going to ask well, what’s it going to take to get that grain out of Jerry’s grubby hands, you know? When is he going to open that grain bin door?”
Soybeans were down over 21 cents for the week and could see more price pressure as harvest progresses. However, the low in November soybeans is $11.81 set back in November 2021, and he doesn’t think the market has to fall that far before the lower prices stimulate demand as the U.S. becomes more competitive for South America. For corn, Gulke believes it’s more likely the harvest lows are in unless USDA increases yield.
“I don’t see that corn has another 20 cent down move unless we really get blindsided in October,” he says.
USDA’s Small Grains Summary was bearish for the wheat market with production increased to 1.812 billion bushels, most of that came from higher Hard Red Spring wheat at 468 million bushels.
“To find 50 million bushels like we did roughly. That’s a big deal compared to the total carryover. For premium wheat, that’s tough.”
Chicago wheat hit new contract lows on Friday and Gulke says that market could project down to longer term lows around $4.68 hit in June of 2010. He says the fundamentals are different than they were 13 years ago, so he cautions producers not to get blindsided.
“We’ll have to see if these lower prices make us more competitive with Russia and we can stimulate export demand,” he adds.
If farmers have unpriced old or new crop bushels, you can contact Jerry for more information at jerry@gulkegroup.com.
