For the week July corn was up 4 ¾ cents, December corn was 3 ¾ higher, July soybeans gained 9 ¼, November soybeans were up 10 ¾, July soybean meal was unchanged, July soybean oil plunged 459 points, July soft red winter wheat soared 21 ¼ , July hard red winter wheat was 9 ½ higher, September spring wheat closed 5 ¾ higher.
Are the Grain Markets Bottoming?
The grain markets closed slightly higher for the week, finally seeing a pause in the fund selling that took corn into new contract lows at the beginning of the week.
Jerry Gulke, president of the Gulke Group, says wheat and soybeans futures held the April lows and bounced off those technical support areas, while corn was even able to stage a slight recovery.
Grains Recover From Ugly Slide
The highs in the grain markets were hit mid-May followed by a quick and ugly slide.Gulke says the market broke on disappointment regarding the China summit and the White House fact sheet which provided only vague details of China’s U.S. ag purchases over the next three years.
“And when it broke to support, that’s when we exited or shorted more and got to actually over 100% sold, including paper. But we got about 50% sold in cash up there.”
Corn Falls Below Cost of Production
However, when old and new crop corn fell to levels that wide out all the gains for 2026 and cash corn in Illinois dropped below $4 and fell below his cost of production, he lifted hedges.
“So, I looked at it and said, you know, this has got to be a cheap place for if China was ever going to think about buying grain, how much cheaper could it get? If it gets 30 cents cheaper or 40, Trump’s probably going to come in and do something to shore it up artificially,” he says.
Gulke had lifted grain hedges on not just corn but soybeans and wheat last week.At the time he saw only minimal downside risk as soybean and wheat markets technically had stopped at the April lows.
Wheat, he adds, has the added the benefit of a poor crop in the United States and hot dry weather in Europe threatening yield potential.
Call Option Strategy to Take Advantage of a Rally
This week Gulke stayed flat in the markets but had clients that were bullish at these low prices and that wanted to do some marketing.
“And I thought, you know, if there is any time to take a risk, this would be it. So, actually for those that wanted to go long grain, and I’m not fond of calls, but we did buy some calls. This is not just in case the market would rise, because a lot of my systems went long,” he explains.
His thought was if the market rallied it would provide the opportunity to either sell more cash grain, with the long calls in place. Or he says farmers could keep the long calls and exercise them into long futures in case heat moves into the Corn Belt in July.
Fund Done Selling?
Gulke says the funds have liquidated their long position in corn and are short wheat, while they have trimmed their longs in the soybean complex.
Typically, speculators don’t get long more than 20% or more of the total open interest according to Gulke. So the liquidation was not unexpected.
As a result, he thinks that will limit the downside risk in the market.
“Certainly, where we turned around last week, if we collapse and go below those lows that we made last week, then that says soybeans are probably going to take back everything they gained in 2026, and so will wheat but I don’t feel like that’s going to happen,” he explains.
In fact, he says the grains are at an equilibrium point where speculators could go either way and buying could come quickly with the right trigger.
“Let China come in here and buy more beans. Buy half a million tons at one time or buy 200,000 or 300,000 tons of corn. And now what are you going to do if you’re a bear?”
So, he says it will be interesting to see how it all pans out.
For more information you can contact Jerry at info@gulkegroup.com.
