Grain Market Update
In the latest weekly report, corn prices increased by 8¾ cents, while December corn rose by 10 cents. August soybeans saw a jump of 22¼ cents, and November soybeans were up 24½ cents. December soybeans also fluctuated, indicating a general upward trend—a 22¼ cent increase—and December soybean meals gained $3.70 with December soybean oil up by 200 points. Meanwhile, the September soft red winter wheat stayed unchanged at 15¾ cents, hard red winter wheat at 3¼ cents, and hard red spring wheat remained at 19¼ cents.
Analysts attribute this recovery in the grain market to a mix of factors, including some short covering as traders prepared for the upcoming three-day holiday. There was also mention of President Trump’s speech in Des Moines, Iowa, where he announced new trade agreements, which may have also played a role. Still, Jerry Gulke of Gulke Group noted that the market was already beginning its upward trend prior to this trade news, suggesting other underlying factors were at work.
USDA Quarterly Stocks Report Offers Insight
The USDA’s quarterly inventory and crop area reports, considered “non-events,” brought little surprise, reflecting expectations with minimal changes noted from March’s forecasts. However, Gulke pointed out some positive signs—a shift in ownership from farmers to quarterly inventories, presenting a different scenario compared to 2024.
As of June 1, 2025, U.S. corn inventories totaled 4.644 billion bushels, marking a 7% decrease from the previous year. Interestingly, off-farm stocks grew by 6%. For soybeans, all positions rose by 4% year-over-year, though on-farm stocks decreased by 12% to 412 million bushels, with off-farm stocks rising 18% to 596 million bushels.
This situation, according to Gulke, differs from June 2024 when farmers had more grain in their hands to sell. Many farmers who kept their grain last season only ended up selling at lower prices have now decided to act sooner.
“This year, farmers recognized the difference,” Gulke explained. They saw the price premiums for the July to December period and decided to capitalize on that opportunity.
The lower amounts of corn and soybeans in farm storage could indicate a move towards stronger cash prices moving forward.
New Biofuel Legislation and Its Impact
In another development, soybeans, particularly soybean oil, benefited from new legislation passed by Congress that extended the 45Z program for biofuel producers. This legislation restricts tax credits to North American-sourced ingredients, potentially providing financial incentives for producers using materials like spent cooking oil and beef fat from Brazil, according to Gulke.
The announcement from the EPA about higher renewable volume obligations, setting a requirement for 2026 at 5.610 million gallons of biomass-based diesel, caught many off guard and could significantly boost the soybean market.
“Our analysis suggests we might need 1.38 billion bushels of soybeans to meet the rising demand for soybean oil,” Gulke commented, noting that this represents about 25% of current production.
Trade Developments and Future Prospects
This week, the Trump administration announced a trade contract with Vietnam. Although it may not drastically change the grain market, Gulke believes every additional bushel of demand makes a difference.
“By imposing tariffs on smaller countries while increasing purchases, it could reduce dependency on China,” he explained.
Gulke expressed optimism about recent flash export sales, which reported 5.9 million bushels of corn and 8.3 million bushels of soybeans, indicating potential growth in demand.
However, he acknowledged that a trade deal with China, should it be announced, would need concrete details for it to positively impact agriculture. “If Trump presents a deal, specifics like buying 50 million bushels of soybeans monthly for the next year would be essential,” he added.
Gulke also mentioned reluctance regarding further market facilitation programs, suggesting skepticism about whether such measures would be necessary if the tariffs don’t yield results.
