For the week, September corn was 8¾ cents higher, December corn gained 10, August soybeans soared 22¼, November soybeans were 24½ higher, December soybean meal was up $3.70 and December bean oil gained 200 points. September soft red winter wheat rallied 15¾, September hard red winter wheat gained 3¼ and September hard red spring wheat tacked on 19¼.
Grain markets all ended higher for the week with market watchers attributing the recovery to a host of factors, including short covering heading into a three-day holiday and speculation President Donald Trump would announce additional trade deals, maybe even with China, in his speech in Des Moines, Iowa on Thursday night.
However, Jerry Gulke, president of the Gulke Group, says the grain markets were already starting to turn prior to that trade news because of other less talked about factors.
USDA Quarterly Stocks Report Contains Bullish Nugget
Much of the trade called the USDA Acreage and Quarterly Stocks Reports a “non-event” as both came in largely as expected and even acreage showed little change from the March intentions. However, Gulke says a closer look at the Quarterly Stocks for corn and soybeans held a bullish nugget in the shift of ownership out of farmers hands and into commercial hands, a situation much different than in 2024.
Corn stocks in all positions on June 1, 2025, totaled 4.64 billion bushels, down 7% from June 1, 2024. However, of the total stocks, 2.56 billion bushels were stored on farms, down 16% from a year earlier. Off-farm stocks, at 2.09 billion bushels, were up 6% from a year ago.
Soybeans stored in all positions totaled 1.01 billion bushels, up 4% from the year earlier. On-farm stocks totaled 412 million bushels, down 12% from a year ago. Off-farm stocks, at 596 million bushels, were up 18% from a year ago.
This is much different than the June 1, 2024, report, according to Gulke: “The stocks in all positions a year ago showed I think 47% more in farmers’ hands versus the year before, which worked against farmers who had grain to sell. They capitulated at the end of August, some of them, which was the low, and then we had a bull market after that.”
Gulke says farmers who got caught holding grain the previous season and ended up selling at lower prices decided to sell early.
“This year, the farmer knew better. He saw the premium of July to December and took advantage of it,” he explains.
The lack of corn and soybeans in on-farm storage should mean tighter basis levels and stronger cash prices moving forward.
Biofuels Policy in “One Big Beautiful Bill” a Game Changer for Soybeans
Soybeans, and especially soybean oil, got another bullish push this week from Congress when the One Big Beautiful Bill passed. The bill extended the 45Z program for biofuels producers and, maybe even more importantly, it restricted the tax credits to feedstocks of North American origin. Gulke says this will provide a financial incentive for biofuels producers to use soybean oil versus used cooking oil (UCO) from China or beef tallow from Brazil.
In addition, EPA dealt a surprise by announcing higher blending requirements or Renewable Volume Obligations (RVOs) at 5.61 billion gallons of biomass-based diesel for 2026.
Gulke says both biofuels’ policies are game changers for the soybean market.
“Our analysis shows it could require 1.38 billion bushels of soybeans to meet the increased demand for soybean oil for biomass-based diesel,” he adds. “That’s about 25% of what we produce.”
Additional Trade Deals Could Provide Demand Push
This week’s announcement by the Trump Administration about a trade deal with Vietnam wasn’t a game changer for the grain markets, but Gulke says every bushel of demand helps.
“If we put tariffs on enough of these smaller countries and get them to increase their purchases of agricultural goods it will add up over time and pretty soon you don’t need China,” he says.
Gulke says he was encouraged to see the flash export sales announced on Thursday morning of 5.9 million bushels of corn and 8.3 million bushels of soybeans, both to unknown destinations for 2024-25.
He admits if President Trump would have announced some type of trade deal with China Thursday night in Iowa it would have been positive for agriculture, but he stresses the deal needs to have specifics.
“If Trump comes up with any kind of deal, it has to have details like they’re going to buy 50 million bushels of soybeans every month for the next 12 months. I want to see some numbers on some bushels,” he says.
Gulke also doesn’t want another round of Market Facilitation Payments: “If Trump comes in and says, ‘don’t worry, if these tariffs don’t work out, we’ve got your back and we’ll send you a check’ that’s not going to work”
For more information, contact Gulke at info@gulkegroup.com.
