Gulke: The Plot Thickens

All was going well towards orderly markets on Friday the 13th, but then, once again, political announcements during trading hours laid waste to the price-discovery process. The soybean trade was caught by surprise, resulting in a limit move down in old-crop soybeans (-70 cents). In fact, the bio-feedstocks, in general, were hit hard, including soy oil, which was down the limit, and canola, which took its biggest one-day hit in perhaps years.

This time, the interference during trading hours was a result of rumors that President Trump was delaying his late-March meeting with China for a month or more. Comments released by the framework team were viewed as lukewarm and rather vague. By the way, we still haven’t gotten a final agreement on the first framework deal made in early November 2025. The protocol of not releasing sensitive information during trading hours seems to have gone astray. While not long on paper in the markets, the extent of the shock surprised me.

The good news was that markets tried to recover on Tuesday, especially the bio-feedstocks and November soybeans. So, barring more of the same neutral-to-negative political rhetoric, we can view, for now, a pause that helps to get a grip on news that has been released and future news to be released, as traders perceive it to be. In other words, will we see a dead-cat bounce in a market that made a huge turnaround, or will it prove to have been a pause that refreshes? Obviously, the technical picture changed abruptly on Day 1 of a week of expectations.

So far, fundamentally, nothing has changed that the market can put its hands on. Weather premiums don’t likely exist, and it too seems nervous. The grain report on Monday of production leaving our shores is still good, with no expectations of a collapse there. In fact, it is perhaps quite the opposite, as China loaded soybeans last week equally out of the Gulf and the Pacific Northwest. All of this is happening ahead of the March 31 Stocks and Prospective Plantings reports.

A lot of hype involved with the cost of fertilizer is exhibited in the media. Even CNBC has speculated that fertilizers won’t arrive in time for spring planting. Once again, not really newsworthy, but shock and awe sells, and maybe we’ll see more outside money coming in at what is being implied as being yield negative. On the surface, the price of new-crop soybeans is still well above where it was in January, as is corn; I wonder who we’ll see blamed for that? Thus, pre-purchasing part or all of fertilizers — depending on one’s management skills — is common.

Energy is also surfacing as a horror story, suggesting production ag in total turmoil. As a reminder, the rack price for diesel fuel was about $2.05 on Jan. 8 when technical signals said to fill the tanks and buy ahead, as it was likely cash prices would not go lower even if crude dropped to $45, as some TV analysts said was possible the day before the crude rally ensued.

Obviously, the news media needs shocks and negative hype. And if one is on the receiving end of being compensated for such shocks, perhaps that helps us all in the short run. But from a longer-term perspective, the jury is still out, and the market will tell the story.

Soybeans, for example, were knocking on the door of breaking a long, long-term downtrend before the 70-cent setback. Corn was also turned back by overhead resistance. Both concerns were mentioned in previous columns and are still concerns. The “reverse thrill” in the market will be how March closes out the month with the big, beautiful acreage and stocks report out in a couple of weeks, where surprises likely lurk behind the scenes. I am expecting one!

Sadly, agriculture broadcasting legend Orion Samuelson passed away on Monday. He was an icon that was an influence in my life when I first started farming. I recall, especially, purchasing a fender-mount radio to tune in to Orion, Max Armstrong and others at WGN who helped put information and fun into my day. I will be a guest on TV this weekend with Max to honor an era of the past.  

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