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Corn and soybean prices normally dive during harvest. This year, that’s not been the case. December corn prices were up 14.25¢ and November soybean prices were up 18.25¢ for the week ending Oct. 2. December wheat prices were up 29¢.
Moving the market this week was a quarterly Grain Stocks report, which USDA released Sept. 30. Highlights include:
- Old-crop corn stocks on hand as of Sept. 1, 2020 totaled 2.00 billion bushels, down 10% from Sept. 1, 2019.
- Old-crop soybeans stored in all positions totaled 523 million bushels, down 42% from Sept. 1, 2019.
- All wheat stored in all positions on Sept. 1, 2020 totaled 2.16 billion bushels, down 8% from a year ago.
These stocks estimates came in significantly below the pre-report average trade estimates of:
- Corn ending stocks at 2.250 billion bushels for corn
- Soybean ending stocks at 576 million bushels
- Wheat stocks at 2.242 billion.
“The report was a shocker, and we seldom get one in September,” says Jerry Gulke, president of Gulke Group. “Normally you can pretty much quantify things.”
In talking with grain elevator managers, Gulke says a few issues were at play such as the quality of the corn crop from last year. As such, the crop had higher amounts of foreign matter and shrink.
“The shrink factor was about 50% higher than normal years, resulting in a disappearance of grain,” he says. “That bad crop from last year came back to haunt us, but it turned out to help prices since this year’s harvest is coming in good but not as good as first thought.”
In soybeans, the book of exports has been higher than most projections. “We haven't had these kinds of times in a long time,” Gulke says.
Will China continue to buy? What happens if La Nina clips South American crops? Could prices keep inching up?
“The market psychology is such that it's going to be going to be kind of difficult to put this new bull market that we've had to bed, without a shock the other way again,” Gulke says.
On Friday, Oct. 9, USDA will release its monthly Crop Production and World Agricultural Supply and Demand Estimates reports. For the national average yields, Gulke thinks it will be hard to lower the soybeans yield much.
“We’ve been hearing lots of reports of yields that are good, but not as good as people thought they would be,” he says. “I think we reduce the corn a little bit, but not by much.”
Read More
Jerry Gulke: Is the 800-lb. Gorilla Back?
Jerry Gulke: Lessons Learned in 30 Years of Grain Marketing
Find more written and audio commentary from Gulke at AgWeb.com/Gulke
Check the latest market prices in AgWeb's Commodity Markets Center.
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.
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