For the week May corn was down 3 ½ cents, May soybeans lost 2 cents, May soybean meal plunged $12.50, May soybean oil soared 190 points, May hard red winter wheat was up 26 ½, May soft red winter wheat gained 9 ¾ and May hard red spring wheat was 20 ¼ higher.
Corn and soybeans were lower for the week and on Friday with a bearish reaction to several positive announcements during the White House Celebration of Ag.
One of the most significant was EPA’s release of the final Renewable Fuel Standard Renewable Volume Obligations for 2026 and 2027.
EPA’s final rule maintains the 15 billion conventional biofuel level for 2026 and 2027.
Blending levels for biomass-based diesel, which includes biodiesel and renewable diesel, were also increased by nearly 60% from the previous standards to between an estimated 5.0 to 5.7 billion gallons according to Clean Fuels Alliance America.
Corn and Soybeans React Negatively to RVO Announcement
Jerry Gulke president of the Gulke Group says beyond the final RVOs, President Trump didn’t talk about anything new for agriculture at the event, so corn and soybeans sold off.
He says when a market reacts negatively to positive news that’s not a good sign.
The RVO announcement had been anticipated for weeks and Gulke says the markets saw profit taking as the news was already priced in.
Soybean oil had been on a tear since January, and old and new crop corn had rallied well off the long-term lows hit 18 months ago.
“There’s an old trader’s axiom, I guess you call it, that says it’s not so much what the report says, it’s what the market does with the report. And if you close lower, on what would otherwise be a friendly or a bullish report, that probably tells you that the majority of that good news was already baked into the price,” he explains.
Even sharply higher crude oil prices failed to rally corn and soybeans on Friday.
Gulke thinks the markets are starting to become numb to the war news and will need a fresh bullish catalyst to resume the rally.
“That’s kind of a caution signal to me that we’d better we better pull another rabbit out of the hat on Tuesday or we may be in trouble for the short run,” he adds.
Markets Await USDA Reports
In fact, corn and soybeans did not totally collapse because the market is waiting for the results of USDA’s Prospective Plantings and Quarterly Stocks Reports on March 31.
Gulke says the trade will be watching to see if the corn acres were reduced even more than initially thought due to the impact the Iran war has had on fertilizer prices and supplies.
He says the Gulke Group’s client surveys on acreage were on the high end of the corn estimates.
“We don’t see the big drop in corn acres and going to soybeans.”
He says the U.S. will need an additional 3.8 or 4 million acres of beans with the higher RVOs and if China does buy new crop soybeans at harvest when prices are low.
Without that kind of a shift, he contends the U.S. will continue to see big corn supplies which will back December corn prices off of current levels.
He says many farmers will make that decision in the next 30 days depending on whether or not they have fertilizer in place and what corn prices do.
“That may make some of those guys switch. And again, then we won’t know until June 30 what actually happened,” he adds.
Is the Rally Over in Corn and Soybeans?
With lower weekly closes and a lack of bullish news is the rally over in corn and soybeans?
He says even if the corn market trades higher right after the report but takes out this week’s lows and results in a lower weekly close that will cause concern.
Gulke says, “I don’t want to risk as much as I did. I wanted to risk more 18 months ago when I felt the market had changed. But if you go back to August of 2024, look at what the prices were at the end of August when we made those lows and where they are now. We’re considerably higher.”
He says soybeans are worth $100 an acre more than they were 18 months ago and even last fall.
Even corn is approaching $5 for March delivery for those that store grain.
Gulke says prices were high enough for him to reward the market with some cash sales.
“I don’t want to be short the futures here necessarily, but I made cash sales at better prices than last fall,” he says.
For more information you can contact Jerry at info@gulkegroup.com.
