For the week, July corn ended 15 ½ cents lower, December corn fell 12 ¼ cents, July soybeans lost 18 ½ cents, November soybeans dropped 23 ¾ cents, July soybean meal gained 10 cents per short ton, July bean oil sank 246 points, July soft red winter wheat lost 8 ½ cents, July hard red winter wheat fell 5 ½ cents, while hard red spring wheat soared 17 ½ cents.
The grain markets were lower for the week, except for hard red spring wheat.
Jerry Gulke, president of the Gulke Group, says he thinks the pressure was largely in response to this week’s surprising trade developments.
An International Trade Commission (ITC) panel ruled the Trump administration’s Liberation Day reciprocal tariffs announced on April 2 are not legal under the International Emergency Economic Powers Act (IEEPA).
“I didn’t see that one coming, and it just made more uncertainty,” he says.
The Trump administration appealed the ruling and was granted a 10-day stay on revoking the tariffs.
However, Gulke says just the fact that it could be held up in the courts will push the timeline of getting trade deals or frameworks done with various countries further down the line.
“And so, all of a sudden, we’re out here 60 to 90 days in the court system, and we haven’t got a deal made that you can set in writing and actually read the details of,” he adds.
Gulke says that means the chance of U.S. farmers selling enough grain to really make supplies tighter is unlikely to happen, and weekly exports sales also show the U.S. is losing momentum.
The U.S. is becoming noncompetitive on corn, according to Gulke, with Brazil’s safrinha corn soon coming to market, a crop that some private firms are now pegging at a record 130 MMT.
Gulke, thinks the grain markets have just given up on seeing new and much needed demand through new trade deals.
“It sure looks like that to me,” he says. “I had hoped and was a proponent of seeing the ending stocks for corn in particular and maybe even beans a little bit continue to tighten because we’d get some countries to buy something just to keep from being in a tariff war.”
Gulke was also hopeful countries in negotiations like India or Japan would buy more soon as a good faith effort, but that hope is starting to fade.
India said this week they would lower tariffs but would not buy additional grain or dairy products from the U.S. in an effort to protect their domestic industry.
“India came over here and said they wanted want to buy more ethanol, but nothing happened, and now they’re saying they don’t want ag on the table because they are nearly self-sufficient,” Gulke explains. “They have a lot of wheat and they don’t need wheat.”
Gulke says if any of these countries look at the Phase One deal the U.S. struck with China and model their deal after that, there won’t be any leverage for enforcement.
“The caveat back then was a one-liner that I’ve never forgotten, and it says: We’ll buy it if the price is right and if we need it. In other words, if you’re competitive,” he adds.
He thinks the market is looking at this and getting tired.
“I know I am,” he says.
For more information contact Jerry at info@gulkegroup.com.
