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As the saying goes, a bear only needs to eat once a year and the bull needs to eat every day. Right now, the soybean market is being fed by large China purchases.
December corn prices were down 1.25¢ and November soybean prices were up 17.75¢ for the week ending Sept. 4. December wheat prices were up 2.25¢.
The soybean market is showing some positive technical signals, says Jerry Gulke, president of the Gulke Group.
“On Monday we had a key reversal higher on a monthly basis,” he says. “The concern now seems to be maybe this crop is dwindling faster than we thought. It wasn't that long ago the outlook was for 800 million or 900 million bushels of bean carryover. Now we're down to 600, and if 2020 yield would fall back below 50 bu a case can be made for carryover falling back to 350 million bushels.”
USDA Report on the Horizon
On Sept. 11, USDA will release its next round of Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports.
“The market is pretty much leaning towards the bullish side,” Gulke says. “Certainly, nobody expects 182 bu. corn. If you can get the national yield down 176 bu. per acre, it would help a lot. If China keeps buying, you can make a case for carryover this year being 2.1 billion bushels instead of 3 billion bushels.”
Farmers should be going into the report on the cautious side, and watch how the market closes after it, Gulke says. Both corn and soybeans have rallied significantly since the August report.
“There will be all kinds of excuses for a price of grain to go down if NASS doesn't come in with a real bullish report,” he says.
Gulke drove through several states last week and saw mature and good-looking crops outside of the weather-damaged areas.
“Apparently the crop is taking the heat and dryness a little better than I thought it would,” he says. “In North Dakota and South Dakota, it’s hard to find a bad field once you get west of I-29. I think a trendline yield that might still be possible.”
Read More
Jerry Gulke: Lessons Learned in 30 Years of Grain Marketing
Jerry Gulke: Will USDA Report Cause Pre-Harvest Lows?
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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Markets
| Corn | ||
|---|---|---|
| Sep-20 | 347^2S | +2^6 |
| Dec-20 | 358^0S | +4^2 |
| Mar-21 | 368^4S | +3^6 |
| Soybeans | ||
|---|---|---|
| Sep-20 | 969^4S | +0^6 |
| Nov-20 | 968^0S | +2^0 |
| Jan-21 | 973^4S | +1^2 |
| Soybean Meal | ||
|---|---|---|
| Sep-20 | 309.8S | +4.6 |
| Oct-20 | 312.1S | +4.5 |
| Dec-20 | 317.2S | +4.4 |
| Wheat | ||
|---|---|---|
| Sep-20 | 539^6S | -3^4 |
| Dec-20 | 550^2S | -3^0 |
| Mar-21 | 558^6S | -3^0 |
| Cotton | ||
|---|---|---|
| Oct-20 | 64.12S | +0.56 |
| Dec-20 | 64.99S | +0.71 |
| Mar-21 | 65.97S | +0.68 |
| Rice | ||
|---|---|---|
| Sep-20 | 12.500S | +0.055 |
| Nov-20 | 12.400S | +0.055 |
| Jan-21 | 12.530S | +0.055 |
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