Mark's Market Talk for June 8, 2026

The grain markets took some big hits last week as funds that had been heavily long in the markets started liquidating positions. A combination of factors contributed to this exit strategy. The war is not over, but oil prices have come down, U.S. weather remains non-threatening, and we found ourselves priced out of the world market.

Just three weeks ago, funds were long well over 300,000 corn contracts, equivalent to roughly 1.5 billion bushels. It was estimated that by the close of trading last Thursday, they had reduced that position to 98,000 contracts. Friday saw additional liquidation as corn traded lower across the board. Both July and December corn contracts closed down 29 cents for the week.

To add more bad news, traders believe there is still a large amount of unpriced old-crop corn in the country, and it appears they are right, as we have not seen much basis improvement. This will likely limit any price recovery unless we experience adverse weather or see a significant increase in export sales. The recent price decline has made U.S. corn competitive again in the world market, which should help work through some of the available supply.

Traders have also cut their soybean long positions in half and now sit somewhere around 120,000 contracts. They continue to wait for China to follow through on the purchases President Trump discussed after his meeting with Xi last month. China is working hard to become more efficient in its use of soybeans in livestock feed by utilizing alternative protein sources. However, the Chinese public has more disposable income than in years past, and consumers are demanding higher-quality food choices. For them, that means well-fed pork, which requires quality protein to produce.

If crude oil has indeed topped and continues to move lower, the exceptional margins currently enjoyed by ethanol producers and soybean crushers will likely return to more normal levels. The Senate is scheduled to take up the E15 bill soon. Hopefully, it will follow the House and approve year-round E15 permanently.

According to Ag Secretary Rollins, an announcement regarding Z45 credits is expected soon. This could provide another boost to the biofuels industry, and right now, we can use all the help we can get.