Speculators also actively sold wheat and soybean complexes during the week ended March 4 – Brown

Scared by tariffs, funds dump corn bets at near-record pace: Brown

A looming trade war between the United States and its two largest agricultural trading partners forced Chicago corn speculators to flee the city last week.

But few of them survived the ordeal.

On Thursday, U.S. duties on most Mexican and Canadian goods were delayed until April . However, the duties went into effect on Tuesday, and the market reaction was harsh, especially since Mexico is a major destination for U.S. corn.

The most active CBOT corn futures fell 8.6% in the week ended March 4 , the biggest drop since mid-2023 . Asset managers reduced their net long positions in CBOT corn futures and options during the week to 219,752 contracts from 337,454 a week earlier.

The net weekly corn sell-off of about 118,000 contracts was the second largest on record, following the 147,000 contracts sold in the week ended February 28, 2023. However, last week’s decline in gross long positions of more than 100,000 contracts was a record high.

On average, the largest weeks of net corn fund sales are about evenly split between exiting long positions and new short positions. Last week’s unusually low 11% move was driven by new gross short positions, suggesting that the selloff was risk-off in nature rather than truly bearish.

On the periphery of the week’s events, the USDA predicted strong U.S. corn plantings in 2025 and thus a rebound in domestic supplies, although this was largely expected. South American corn crop forecasts have also recently improved.

But available world corn stocks are historically low, especially in Brazil, where stocks are the lightest in two decades. Demand, meanwhile, has persisted, encouraging investors to build a bullish position in corn after building a record bearish position last year.

SOYBEANS AND WHEAT

Speculators also actively sold wheat and the soy complex during the week ended March 4, but unlike corn, these moves were driven by new short positions.

Fund managers abandoned their net long positions in soybean futures and options at CBOT, moving to net short positions of 35,487 contracts versus net long positions of 8,209 the previous week. The funds’ bullish period in beans lasted just seven weeks, and net selling in the latest week was the strongest since last June.

The most active CBOT soybeans fell nearly 5% through March 4, while soybean meal fell 3% and soybean oil fell 7%. Funds liquidated most of their net long positions in CBOT soybean oil futures and options, which fell to 9,669 contracts from 4,3052 a week earlier.

Their net short position in soybean meal futures and options hit a 10-week high of 85,344 contracts versus 63,193 the previous week, which was almost entirely the result of new gross short positions.

In CBOT wheat futures and options, the entry of new gross short positions was the largest for any week since 2017. Money managers also added a few gross long positions, although net short positions rose to 82,399 contracts from 67,614 a week earlier.

So far this year, bearish fund bets on wheat and bullish bets on corn have historically not matched, although last week’s huge corn sell-off brought things closer to normal.

However, corn futures have gained nearly 4% over the past three sessions due to the delay of U.S. tariffs on Mexico and Canada. Other gains were soybeans 2.6%, wheat 2.7%, soybean meal 3.7% and soybean oil 1.4%.

This week, the trade will keep an eye on the U.S. Department of Agriculture’s monthly supply and demand report, which will be released on Tuesday. No big changes are expected, although the agency may factor tariff impacts into its estimates if it deems it necessary.

Karen Brown is a market analyst for Reuters. The views expressed above are her own

Tags: soybean, wheat, corn, prices