Gulke: Organized Chaos

After 2026 price tests of some key support levels last week, there is both good and not-so-good news to report.

After successfully taking out lows for corn especially, December futures snapped back with a quick 15-cent recovery. The bad news: prices could not sustain a level above the critical $4.50 mark — the key 2026 support level — and have since languished below it, retesting recent lows. While the market seemingly is going nowhere fast and recovered where it should have, there is not enough good news to support an uptrend. It acts tired.

Soybeans also reacted last week, staging a more encouraging snapback of 35 cents over just two days. The bad news, as with corn, is that the move has not been sustainable. On the bright side, soybeans have recovered above their April lows — but just barely. Chicago wheat has acted similarly, still holding above April highs.

You will recall the importance I placed earlier in this column on prices holding at the March/April/May lows. Corn violated all of that support, but wheat and soybeans, while breaking through the May lows, have held at April. Failure at those levels going forward would increase the odds of further price deterioration in corn — and likely pull soybeans and wheat along to complete the trifecta of testing, and possibly taking out, 2026 lows. Seasonally, the odds increase that pre-harvest lows will be posted by the end of August.

If markets look tired, it is no wonder. They have been whipsawed, going all the way back to late October and early November 2025, when the first U.S.-China agreement to purchase 12 million metric tons of soybeans was announced. Fast forward to the mid-May summit, and there is still no signed agreement from either meeting. Letters of intent or memorandums of understanding (MOUs) seem to substitute for contracts that use the word “shall” rather than “may” or “will” — language that is not as legally binding. That appears to be the new operating mode, keeping markets and prices guessing on the demand side of the equation. The situation with Iran further illustrates the point:

— In comments Monday afternoon, President Donald Trump said funds from de-sanctioned Iranian oil sales should go exclusively toward purchases of U.S. agricultural products to help American farmers. He noted that Iran has 91 million people and is struggling to feed them and warned that if Iran does not honor its deal, he will take necessary action. The Iranian delegation said Tuesday it would not confirm that funds would be spent on purchases of American corn, soybeans or wheat.

— The United States authorized Iranian oil sales, easing decades-old sanctions as part of a push toward a final peace agreement with Tehran in exchange for commitments on nuclear inspections and free transit through the Strait of Hormuz. The general license, announced by the Treasury Department, permits the sale of crude oil and petrochemical and petroleum products of Iranian origin through Aug. 21.

Just as the administration seems intent on keeping the non-ag world guessing, the agricultural community finds itself in limbo as well. That uncertainty has been made plain most recently in ag commodity futures from May 13 to the present — mirrored in stock market indices that have gone sideways at best, and in crude oil, which is solidly in a downtrend.

Like it or not, this may be the theme for the next two years as events continue to unfold. But as we saw following the release of the Trump-Xi summit fact sheet, things can change overnight — or, in fact, within a single trading session.

We have always had to manage price risk, but the current lack of certainty has left many of those affected either anxious or simply disengaged.

President Trump does not favor those who short the stock market or look unfavorably on commodities — a reality that keeps me restless, waking up in the night running through what-ifs.

This isn’t my first rodeo. But I am not liking the ride.

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