For the week May corn was down 1 ¾ cents, December lost ¾, May soybeans plunged 64, November soybeans fell 20 ½, May soybean meal gained $5.30, May bean oil lost 193 points, May soft red winter wheat was 18 ½ lower, May hard red winter wheat was down 23 ¾, May hard red spring wheat fell 17 ½.
Grains were all lower for the week with profit taking heading into the weekend and seeing a needed correction after a rally that has lasted for more than six weeks.
Jerry Gulke, president of the Gulke Group, says the grain markets have been a buzz with headlines around the Iran war and energy prices.
He says the rally in crude oil is about global energy security but it has benefited the grain markets and just provided another fundamental reason to justify a market that technically looked like it was poised to move higher several months ago.
“When you make new highs for the year and month, go higher than January and February in March, and you’ve got soybeans at the highest level since 2004, and even wheat is going up. Now you’ve got to ask yourself, what’s going on that made that possible? And I think the war is one of those things and it’s all energy security.”
Global Food Security
According to Gulke, global food security is also a big part of the recent strength in the energy and grain market.
“There are countries that are begging for not only energy, but maybe not getting fertilizer because the Strait of Hormuz is closed. You’ve got to ask yourself if you’re one of the countries, how much do I really want to rely on Brazil or Russia or the United States to get me grain when the path to my country has been blocked?”
Gulke says when shipping shuts down and you can’t get food, energy or fertilizer at any price it changes the attitude of the market participants because there are many countries that aren’t food independent like the U.S.
“I always ask people that doubt all that. What would you pay for a loaf of bread to feed your kids today if you had one when you’re not going to get another one for two weeks or three weeks? It’s priceless,” he adds.
Gulke says just-in-time inventory works for companies that supply parts or less perishable products.It doesn’t work for people that need food on a 30-day or 60-day basis.
Time for a Grain Reserve?
Gulke wrote a column in Top Producer a couple of years ago about how it was high time that the world did not rely on the U.S. to be the supplier of last resort, so to speak.
The Iran war has renewed his idea that the time has come for some type of grain reserve where countries would have a 30-day or 60-day supply on hand all the time.“If it’s 60 days, how much did that cost them versus not having it? And we see the riots in Cuba for not having lights on. You know, what happens if they don’t have the food come in? I don’t think any government wants to take that chance. And I think it’s a small price to pay for food security.”
That might take building grain bins or extra freezer storage for meat, but according to Gulke it would be worth it.
Corn at $5
Even with the slight correction on Friday, new crop corn and soybeans have been gaining on old crop already pricing in higher fuel, fertilizer and shipping costs for 2026 and even 2027.
In fact, March 2027 corn ended at $5 and it’s a level many farmers thought was unattainable just a few weeks ago according to Gulke.The market was so negative for the last year about a record crop in Brazil and the idea the U.S. could not compete, which held back any promise of prosperity.
Gulke says these price levels have given farmers some marketing opportunities.
“You know $4.50 was a big deal. Now we’ve got $5 corn for next year.If you’ve got storage at home, you can pick that up and hedge it off and make money on the basis gain.”
He says there are various marketing tools and farmers can use futures and options at the right time to lock in these levels.
Marketing Strategy
The Gulke Group did recommend clients sell some corn on Friday.
“I think we sold 10%. We made our first sale of November soybeans, and it was over $12. I wanted to net $12 out of the field. Didn’t quite make, I think I got $10.95 for the first 10% or 15% that we sold. From here on up, its profit,” he details.
Gulke recommends farmers look hard at their break evens with trusted advisors and start assembling a marketing plan.He says producers need to take advantage of the strong market in case things change, including the weather.
“As a farmer I tell myself, I’m hoping to sell 10% or 15% of my cash grain out of the field. And if I’m wrong at $12 in soybeans, then so be it. We’ll worry about that later down the road. It’s interesting to see this unfold. I’m not negative by any stretch of the imagination about the future, but I’ve got enough common sense to say you know, I’m not going to risk my farm.”
For more information contact Jerry at info@gulkegroup.com.
