Gulke: Now We Wait

From a short-, medium- and long-term perspective, the market’s response to the China/U.S. Summit can be summarized as follows: the short-term daily picture remains negatively biased, with traders waiting for the other shoe to drop. This comes against a backdrop of a medium-term weekly outlook in which new-crop soybeans appear most promising, while the long-term monthly outlook remains positive — for now.

Given the somewhat open-ended results of the summit fact sheet discussed last week, markets can fall under their own weight — gravity being the culprit when there is simply no new good news to support prices. Weather remains the only likely near-term catalyst, and it is a mixed bag, to say the least.

Concerns over both too-wet and too-dry conditions across many different areas suggest that, with planting spread over a wider timeframe than usual, harvest will likewise be stretched across a broader window this fall. Assuming conditions return to normal soon, an average-looking crop remains on the horizon — whether we choose to accept that or not.

In the meantime, before a single acre of new-crop corn or soybeans is harvested, someone will have to absorb the excess — roughly 1.9 billion bushels of corn and 300 million bushels of soybeans — carried over on Sept. 1, 2026, before the market even begins working on the 2026-27 crop. It is that new-crop scenario that has markets buzzing.

So now we wait for something new to emerge and influence prices. A phrase I heard in the ag media this morning — “confused chaos” — may best sum up the situation. If the market cannot find new fundamental drivers to anchor its outlook, it may resort to the technical picture. With new-crop corn and soybeans squarely in the sights of the large speculator, Friday’s CFTC report revealed net-long positions of 327,000 contracts in corn and 149,000 contracts in soybeans, respectively — signaling very high interest in new crop and considerably less in old crop. Total net-long positions stand at 148,000 in corn and 107,000 in soybeans, both of which have declined across all contract months, suggesting that serious spreading is underway. In other words, a lot of eggs are in the new-crop basket.

Not only are revised acreage intentions important on June 10, but yield estimates will be equally scrutinized. Concerns are already mounting — at least among the large specs, who, as you may recall, tend to be far more forward-looking than the average producer or trader.

If there is a carrot dangling out there, it appears to lie in the new-crop 2026-27 marketing year. The specs favor that scenario, given uncertainties surrounding fertilizer costs and availability, as well as the prolonged conflict involving Iran. There is no shortage of items commanding the market’s attention. For now, prices appear negatively skewed, with the medium-term weekly chart perhaps offering the best refuge for those with a bullish outlook.

As for me and my house, preservation of capital remains paramount, and a defensive posture is warranted as we close out the final full week of May. Adversity can arrive like a thief in the night — when least expected.

Jerry Gulke can be reached at (707) 365-0601 or by email at Jerry@gulkegroup.com