For the week December corn lost 5 ½ cents, March corn was 7 ¾ lower, November soybeans plunged 30 3/4, January soybean fell 33, December soybean meal was $8.50 lower, December soybean oil was down 89 points, December soft red winter wheat was 10 ½ lower, December hard red winter wheat lost 15 ¼, December hard red spring wheat dropped 18 ¾.
Grain markets ended lower again for the week with November soybeans losing nearly 31 cents and making new lows for the move on Friday.Corn saw a third straight week of losses and is down 54 cents over the last three weeks.
How Low Will Grain Prices Fall?
Row crop futures have been pressured by harvest and technical selling, plus the hangover of higher yields in the October WASDE. How much lower will prices fall?
Jerry Gulke, president of The Gulke Group, says grain prices need to go low enough to be competitive and stimulate demand.
He thinks the market is in a new price discovery phase with the realization that China may only buy the 25 million metric tons (MMT) they committed to annually through 2028.That was confirmed with China not dropping its 10% reciprocal tariffs on U.S. soybean imports.“And that’s what likely put the top in, as they didn’t talk about doing any more than 25 million metric tons of soybeans,” he explains. Plus, there is no evidence China is going to buy the pro-rated $17 billion of other ag goods.
No Threat in South America
Prices also have to fall far enough to compete with record crops in South America according to Gulke.
This week Conab forecast a record soybean crop in Brazil for the 2026/2027 growing season at 181.62 MMT, up from 180.4 MMT last year.They pegged the corn crop at 148 MMT, which is up from 144.5 MMT last year or 2.4%.
So far, Gulke says the hype around Super El Nino and the weather problems it would create in South America have not produced a threat to production.Brazilian farmers are planting the soybean crop at a record pace.
“To stop going down the grain markets will need to see a production problem in Brazil and so far, it looks like a decent start to the season,” Gulke says.
USDA’s Gut Punch
The corn market also has to go low enough to price in the additional 407 million bushels of corn USDA added to the supply and demand tables from the last two reports. While USDA also raised corn demand for 2026-2027 by 125 million bushels, Gulke thinks USDA is too optimistic on exports.
“For three years, we said we’re increasing corn consumption by increasing exports by 20% per year. So now you look at this level and say, are we going to be able to ship more? When we were at $5.00 and $5.50 a bushel, probably not. It’s pretty easy to grow when you’re in the high $3 and the high $4 levels but when you get into the middle $5 level you’re going to grow another 20 percent? I think not.”
Bull Market Over?
Gulke says the new contract highs set in September in corn at just under $5.50 basis December and November soybeans at $13.35 have been confirmed as the highs for the year in his opinion.
He says it is unusual to put the top in in September when the previous two years the bottoms came at that point in time.
“Two years ago, when we said there was a shift in our thinking worldwide as how we were going to do business, we went up from there. It’s been a two-year uptrend. From my experience, bull markets are new philosophies that come into being, whether it’s a new administration or Trump’s tariffs to get China to come back to buy. That bull market lasts about 18 months to two years,” he explains.
This year’s weather extended that bull market, in Gulke’s opinion, and caused the top to be scored in September instead of July. “And instead of bottoming in August, like we did the last two years. We put a top in. Now we’re searching for a level that’s going to get us competitive again, and we have to prove that we can get rid of this grain.”
Gulke says the charts predicted these moves in advance allowing them to get positioned to withstand the change in trend. With Dec corn correcting 75 cents off the contract highs that is $150 per acre of lost revenue, which again drives home the importance of sound risk management.
For more information contact Jerry at info@gulkegroup.com.
