The grain markets all ended higher last week with a new high close for the move in corn. Jerry Gulke, president of the Gulke Group, says fundamentally many in the trade will try to attribute the rally to the cold weather and how it has slowed grain movement from truck to barge. However, he says, the corn market has technically looked good for a while.
Coincidentally this comes just two weeks after the shock and awe in the corn market from the January WASDE and final crop production report, where USDA increased production to a record 17 billion bushels with an unexpected 1.3 million acre increase in harvested acres.
Is Something Going on in the Corn Market?
After the 25 cent drop in corn prices Gulke says it uncovered some insatiable demand as end users saw those price levels as a bargain. USDA has continued to report a string of large flash export sales. For the week ending Jan. 16, export sales were nearly 158 million bushels. That was a marketing year high, and a level not achieved since 2021.
The U.S. corn export market has an advantage the first quarter of a new year, according to Gulke. Generally sales are steady to higher but rarely run at this blistering pace.
“If the export sales continue in corn, you may have to raise the export projection from USDA even higher.”
In fact, he predicts USDA’s record export projection of 3.2 billion bushels could be 75 million bushels too low.
Is China Buying Corn?
Gulke also thinks it’s possible the flash sales of corn to unknown destinations could be China because corn export sales normally go to Mexico and there are hardly any export customers afraid to report they are buying U.S. corn.
“We’ve got to watch China. They’ve been bragging about how good the crop is but maybe their crop isn’t as good as they thought,” he explains.
Can Corn Recover to Pre-WASDE Levels?
Corn lost over 25 cents after the report and broke out of the bottom side of the sideways trading range it had been stuck in for months. Gulke says while it’s not impossible for corn to rally back to those levels the odds don’t favor it.
“Why would corn ever go up there knowing full well there’s tons of grain that’s going to be sold off the farm. I guess we proved that in the report with on-farm stocks. What shouldn’t happen is if this market is that bad, you shouldn’t get a second chance,” he explains.
He says the market may retrace 50% of that price drop as it’s already bounced nearly 15 cents off the lows, but he’s not confident in a further recovery without a major catalyst.
Corn Is In Price Discovery Process
Gulke says the corn market is just starting its price discovery process for the 2026 crop, which is not so much about what you know.
“It’s what you don’t know that is going to come and surprise us like the WASDE did on the downside, which has helped get corn prices low enough to where we are going to stay competitive until Brazil finally harvests their big crop a few months down the road,” he says.
The corn market is also entering a critical time where farmers who did not already apply fertilizer in the fall are making 2026 planting decisions. Currently, Gulke says corn acreage is expected to drop three to four million acres. Their early client acreage survey results show little, if any, increase in corn acres and a few farmers have switched to soybeans because of the lower input costs.
“If you like your 50-50 rotation it’ll stay that way,” he says.
If that is the case it will be difficult to drop carryout much under 2.2 billion bushels, which would keep corn stuck in its current trading range.
This is also the time of year, according to Gulke, when you expect to see some weather premium being added to the markets.
“I don’t think there’s any weather premium in corn right now. If there is, it’s very little,” he adds.
He says it’s also been a few years since the U.S. has had a wet spring or any planting delays to cause a weather rally, but there are still many unknowns about the weather for the 2026 growing season.
February Crop Insurance Price Period
The corn market is also entering February when crop insurance guarantees are established for spring crops.
“There are new high closes I think in wheat for the year, corn and in beans as well. We’re doing some things in the month of January that are very interesting. We’ll see if we can continue that into February,” he says.
Currently corn prices are close to last spring’s levels. However, with the improved crop insurance premium subsidies in the One Big Beautiful Bill, Gulke says farmers could still see better guarantees than in 2025.
“A lot of farmers are telling me they can buy insurance with up to 95% coverage using some of the Farmer Bridge Assistance payments they’re receiving,” he explains. The crop insurance price guarantee for corn will further affect farmers’ decisions on whether they want to plant more corn or not. He says unfortunately instead of farmers taking their cue from the market, they are getting signals from government policy and programs.
For more information, contact Jerry at info@gulkegroup.com.
