For the week, July corn was down 6¼, December corn lost 6½, July soybeans slid 1¾, November soybeans gained 5, July soybean meal lost $2.20 per short ton and July bean oil gained 36 points. July hard red winter wheat fell 1, July soft red winter wheat gained 3¼, while hard red spring wheat plunged 20.
Corn had another lower week with new crop making a new low close for the year with a late week selloff in soybeans and soybean oil leaving a bearish tone to the markets.
Jerry Gulke, president of the Gulke Group, attributes the bearish tone of the grain markets to several factors.
Lack of Progress on Tariffs and Trade Deals
Gulke says the market is becoming impatient with the lack of solid details and proof of progress on trade deals with China, India, Japan, South Korea and other countries. Despite easing of tariffs with China this week, he says the only market that has reacted positively has been the stock market.
The Trump Administration, according to Gulke, is talking about trade deals, but there are no signed contracts or any purchases taking place.
“There’s not one sentence in this administration’s contract so far on tariffs, nor in the Phase One with China, that contains the word “shall.” If you write a contract, you can say you may do this, or you might do that or you should do this or else. But when you say you shall do that, that means you better doggone adhere to what the contract says,” he explains.
Even in the Phase One deal with China, Gulke says the contract gave China an out because it stated they would buy based on “commercial considerations.”
“That’s code for I will buy if you are cheap enough, but I won’t throw my other trading partners, especially South America, under the bus,” he explains. “They want to blame it on the Biden Administration for not enforcing the Phase One, but there wasn’t anything concrete to enforce.”
The U.S. has also failed to see any new agricultural export business because of these deals, according to Gulke.
“I want to see some bushels moving. There have not been any large flash export sales, announcements of future purchases, nor have any of these countries shown up buying large amounts of ag products on the weekly export report,” he points out.
Gulke believes the administration doesn’t want to get caught doing proactive sales and then end up with a short crop.
“Who pays for that? The taxpayer. The administration looks ahead politically and says let’s kick the can down the road until we know more. By then I’ll be harvesting,” he says.
Trump Administration Throws Biofuels Under the Bus
Soybean oil collapsed late in the week with limit down closes in every contract month on Thursday and follow-through selling on Friday. The melt down was in reaction to conjecture regarding the blending mandates for biomass-based diesel.
EPA released their draft proposal on the Renewable Volume Obligations to the Office of Management and Budget on Thursday.
Unconfirmed rumors were that the blending levels in the Renewable Fuels Standard would be only 4.65 billion gallons for 2026. This comes after the biofuels industry and American Petroleum Institute agreed to recommend to EPA higher volumes at 5.25 billion gallons for 2026 and 5.75 billion for 2027.
Rumor or not, Gulke says bean oil put in a bearish key reversal and a likely top.
“If you take a look at a chart, we made a classic one, two, three top. In other words, a good bull market usually has three major moves. When you’re talking about an increased mandate for biofuels and a subsidy on those gallons, but then you come in below that, biofuesl producers get out of the bean oil market in a hurry,” he says.
Gulke further explains that coincided with high in bean oil prices and the third step higher, which confirms a top in the market.
“When you have President Trump making deals with countries like Iran and crude oil prices dropping below $60, it is hard to see how the administration is going to support biofuels,” he says.
Favorable Weather Beats Good Demand
Corn and soybeans both had bullish news in the May WASDE with ending stocks coming in below expectations. Yet corn reacted negatively. Gulke warns there is a problem in the corn market.
“With all the good exports we’ve got, you have to ask, why are we making new contract lows in corn for 2025? We have also failed to make new highs in 2025 in beans. The market came close again in February and then this last week. That is normally not the case, so you have to say something is wrong here,” he says.
Some of the bearish reaction could be tied to the pace of corn planting nationwide, Gulke adds, and the dry areas of the western Corn Belt finally receiving some much needed rain. End users in the market are comfortable there will be plenty of supply with the 2025-26 crops coming in just a few weeks.
For more information, contact Jerry at info@gulkegroup.com.
