The June Acreage report provided some positive momentum for the corn market this week. USDA estimates U.S. farmers planted 89.1 million acres of corn, which is down 1% from last year. For soybeans, farmers planted 89.6 million acres, which is also down 1% from last year.
Overall, the report confirmed that production levels should be high for all major crops.
“One of my fears is that we’d end up getting a decent crop, and now it looks like a record crop—again on corn, barring July and August weather,” says Jerry Gulke, president of the Gulke Group. “And yet, corn rallied pretty well—it did a good job of turning around. So, we had more acres of everything, and yet the market didn't totally collapse.”
Soybean prices, however, did not react as positively—posting a key reversal lower.
“There was good news in the report, but not such a good reaction by soybeans,” Gulke says. “Soybeans tried to go higher with corn and wheat, but couldn’t hold. They closed for new lows for the year and the last 10 years. You couldn’t find a grain of hope for soybeans. That gravely concerns me.”
USDA’s quarterly Grain Stocks report numbers came in as expected, Gulke says. Soybean stocks totaled 1.22 million bushels, up 26% from June 1, 2017. Corn stocks totaled 5.31 billion bushels, up 1% from the same time last year. All wheat stocked totaled 1.10 billion bushels, down 7% from a year ago.
“Now that we got this thing out of the way, we can return the weather, which looks hot and then wetter,” Gulke says. “There’s nothing on the horizon now that could really hurt us. But it isn’t cool and wet, it will be hot.”
30-Day Temperature Forecast
Corn prices were likely influenced by the weather maps, whereas soybeans continue to be plagued by Chinese demand issue. The important weather month for soybeans will be August, Gulke says.
Overall, Gulke says, a positive story is still developing for corn.
“We've been pretty friendly corn for a long time,” he says. “I was quite shocked that we lost 30 to 40 cents in it. Most recently, the basis has been narrowing in my area for the first time this year. So, there's still great demand for corn, and we see it with every export sales report.”
Gulke has spent the week in North Dakota. He says crops haven’t looked this promising in a long time. In his “Rest of the Story” column next week, he’ll share more of his crop report, as well commentary on how trade issues continue to weigh on the grain market.
Read it, as well as previous columns, at www.AgWeb.com/Gulke