For the week July corn fell 4 ¾, December corn lost 10 ¾, July soybeans gained 11 ½, November soybeans were up 2 ½ cents, July soybean meal fell $4.60 per short ton, July soybean oil soared 147-points, July canola gained $26.10, July hard red winter wheat fell 19, July soft red winter wheat dropped 17 ¼ and July hard red spring wheat lost 13.
Soybeans had a higher weekly close, with the July contract staging a technical chart breakout and finally closing above the 200-day moving average.
The soybean market has been surprisingly resilient and outperformed most of the trade’s expectations amid bearish sentiment regarding South America’s record soybean production and the tariff war with top soybean export customer China.
Jerry Gulke, president of the Gulke Group, says, “Soybeans have been the surprise. We had all kinds of fundamental reasons why this shouldn’t happen because of the monster crop in South America. And it even got bigger this last week according to estimates from crop consultant Dr. Michael Cordonnier.”
Gulke says there are several factors that have allowed the soybean market to shake off all this negative news and establish an uptrend.
One is exports as cumulative soybean export sales are running 13% ahead of last year.
China has shifted to buying beans from Brazil as they normally do at this point in the marketing year.
However, exports have stayed fairly strong as many other smaller customers have stepped up to fill the void.
Japan was the top buyer in the week’s USDA export report and trade officials say the country plans to ask independent firms to buy more soybeans to avert U.S. tariffs.
Gulke says other countries may also buy more U.S. soybeans in coming weeks as deals are struck.
There has been a paradigm shift in the soybean market that Gulke believes has allowed it to shake off this negative news and rally.
“I think a year ago or so last fall I said that the gorilla (China) is gone basically saying we don’t need China anymore in corn or soybeans and we should look at domestic uses like biofuels.Maybe we need to take a lesson from other countries,” he explains.
Amid growing global demand for biofuels, U.S. soybean oil prices have also hit levels not seen since December of 2023 and canola prices have followed, which also lifts soybean values.
The surge in the soybean oil market has been on the heels of exploding U.S. exports, now totaling over 2.143 billion pounds so far for the 2024-25 marketing year, which is a 14 year high.
Many countries have biodiesel mandates, including Malaysia, Indonesia and India and are buying U.S. soybean oil as a feed stock.
More demand may be on the way with India potentially signaling they will buy more U.S. soybean oil under a new trade deal with the U.S.
Plus, the Environmental Protection Agency is expected to raise the Renewable Volume Obligations (RVO) or raise mandated blending levels for bio-mass based diesel in the Renewable Fuels Standard for 2026.
Even new crop November soybean prices have been supported by the lower U.S. acres.
Farmers said in March they intended to plant 3.55 million less acres of soybeans and that will tighten the ending stocks for soybeans below the current 380 million bu. which is price positive according to Gulke.
For more information you can contact Jerry at info@gulkegroup.com.
