Gulke: December Focus — Bull or Bear?

Last week’s column pointed out the prospects for a post-Thanksgiving trade trend change that so often can happen. Monday started out rather lackluster and prompted thoughts by the media that perhaps holiday trading had started early. Tuesday was quite the opposite, with corn leading the way higher, lending credence to my outlook.

The continuous corn chart showed that as of Tuesday, March futures would be the lead contract and print gaps higher to start the day, week and even the month. Rarely do we see such an occurrence of all three indicators. Corn gapped above its 52-week average, adding to the interesting post-Thanksgiving trade expected to evolve.

So now what? Have we started a December uptrend similar to last year, when Dec futures closed at highs for December? Or is this just another rally media pundits want to sell into or buy expensive put options, putting another floor under prices like advised since the end of last August, when this column wrote the fall harvest lows were in. That was then, this is now!

One of the items left that is updated weekly, irrespective of the lack of USDA fundamental data, is the grain inspections of commodities leaving our shores, not to be confused with the weekly export sales, which will someday be reflected in a grain inspections report. USDA is woefully behind in trying to catch up with weekly sales, but thankfully, it has nothing to do with inspections. It is beyond me why weekly exports can’t be reported in a timely manner along with historical data. Anyway, the data in the chart accompanying this week’s column at least reflects demand, or lack thereof.

Corn exports have exceeded year-over-year for the past three years on their way to a record over 3.0 billion bushels. USDA raised 2025-26 exports last month, and the inspections bear that out, even for speculation that USDA is still too low. Exports year to date versus last year are about 7.8 million metric tons (mmt) higher than last year, or nearly 320 million bushels ahead, while soybeans are still 10 mmt lower than last year. Even wheat is 3 mmt over last year. Action to date will be used as rationale in the media for what happened on Tuesday in markets, with the good advance in corn, wheat nervousness and soybeans lagging. It is as if corn is trying to keep its attractiveness as if to say, “We can’t afford to lose acres to soybeans this spring, as we will need them.” Or it is stacking the deck to sucker in producers to plant one more year with crop insurance upping the ante.

Bears in the market — as well as bulls — will have a decision to make by the end of the week. If Tuesday was the start of the new post-Thanksgiving trend, then corn is attractive and soybeans, with their $1.40 rally, are now overpriced, as Brazil will be harvesting in five to six weeks and is already competitive. My concern still is that when the framework turns into a signed document, it will be disappointing to the trade if it is a mirror image of Phase One under Trump One, or if it is lacking amounts, specific commodities and leaves intact the need for Chinese imports or competitive pricing.

From my standpoint, I exited some hedge coverage last Friday, for obvious reasons, and bought call options against the reset as a hedge against remaining hedges in corn and as partial re-ownership for corn sold off the combine. Soybeans are in such a state of flux that I wonder about the validity of owning any beans at all. New-crop soybeans have become more defensive, as if to believe soybean acres will rise by 3 million to 4 million acres, with corn the loser. Again, the devil will be in the details of the new signed trade agreement, and to think that those details won’t be known or reflected in the market would be naive on my part. Price discovery is already at work.

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