For the week, July corn was 7 ½ cents higher, December corn was 5 ½ higher, July soybeans gained 19 ½, November soybeans tacked on 17, July soybean meal lost $2.40 per short ton, July bean oil was up 10 points, July soft red winter wheat was 10 ½ higher, July hard red winter wheat lost 6, July hard red spring wheat was up 5.
Grain markets saw a volatile week on the roller coaster of news on the China trade framework.On Sunday the White House released a fact sheet that stated China had agreed to buy $17 billion of U.S. ag goods annually for 2026 (prorated), 2027 and 2028.This was in addition to the 25 million metric tons (MMT) of annual soybean purchases through 2028 agreed to in the October 30 meeting.
China Fact Sheet Doesn’t Change Gulke’s Mind
Last week Jerry Gulke, president of The Gulke Group, predicted the highs had been made in the grain markets on May 13. After reading the White House fact sheet on the China trade framework, he says he hasn’t changed his mind.
“I’m actually more convinced now, or I should say the information that came out supported my theory that the highs were going to be made in May,” he states.
Gulke says the market had rallied in anticipation of the trade framework being struck with China and when there was no initial confirmation of ag purchase agreements it sold off.
Beyond that, he says the marketplace was disappointed with the fact sheet, “It got them excited at first until they read it, then realized that it probably isn’t any better than what Phase one was under Trump’s first administration.”
Gulke thinks it is good news that the two countries are going to talk and have some meetings; the bad news is there is no enforceability with the framework or purchases.“There’s a lot of openings in there that say, boy, if you do this, I don’t even have to tell you that I’m pulling out. Everybody ought to read the details in that fact report,” he explains.
The market has retraced under the highs and Gulke says it will continue to retract until something changes. “We’re going to need China to buy something and the longer they wait in doing so, the more concerned the bulls are going to get and then we fall under our own weight. And China knows this. They’ve been at this game for 20 or 30 years, you know.”
Market Drifts Until China Buys?
Gulke thinks it’s likely China will buy corn.“I doubt that $17 billion includes soybeans and Secretary Bessent said soybeans have been taken care of.”
The only way China will buy more U.S. soybeans is if South America has weather problems.
China has indicated they want to buy other ag products like fruits and nuts and Gulke adds even machinery.
“So, we need to see some agricultural products, and that includes an awful lot of things. They can buy wine and nuts and grapes, and they really like our beef and they’re going to buy beef from us. The parts that we don’t eat in the U.S.”
However, he stresses the sales need to come soon or the market will get impatient and drift lower. “The longer it takes, the harder it’s going to get to get the bulls back in the market.”
Chart Signals Flash Red
Gulke says the December corn chart also indicated the highs were forged on May 13.
It started back with bottoming action in old crop corn when the August 2024 lows were forged.“We tested those levels and we made those low and went higher. Those rallies usually last about 12 to 18 months.”
He explains that if a market can continue to make higher highs, it’s an uptrend.
“If March can take out the February high, an April can take out the March highs, then you’re on to something. And we had a lot of successive weeks where we never closed below the previous week’s low in corn for quite a while since that January 12th crop report.”
Gulke says December corn made new highs in May but to close above the April highs and keep the uptrend going the market needed something significant to come out of the China summit. When it didn’t get that catalyst, the market backed off and fell below the April highs.
According to Gulke to keep the uptrend going December corn will need to close higher for May and above the April highs.“If it can’t hold and reverses back into the April trading range, you’ve kind of exhausted all the buying, all the anticipation.”
That technical picture could change quickly if China starts buying ag products through framed contracts or the market starts seeing flash sales.
At that point Gulke says he will reconsider his position.
Otherwise, the only other thing that could push the market to new highs would be a weather problem.
For more information you can contact Jerry at info@gulkegroup.com.
