Speculators in Chicago corn markets have made historic moves in early 2025. Geopolitical tensions and supply concerns triggered heavy selling, turning a previously bullish market bearish.
However, as June begins the U.S. summer corn growing season, investors are adjusting their outlooks based on weather and crop conditions, which can quickly shift market sentiment.
In the week ending May 27, money managers slightly reduced their net short position in CBOT corn futures and options to 100,760 contracts, a drop of less than 3,000 contracts.
This follows a massive selloff from late February to mid-May, where speculators sold over 420,000 contracts—equivalent to 2.1 billion bushels—the largest such volume in 11 weeks on record. During this period, corn futures prices fell 10.5%, with December new-crop corn dropping over 6%, settling at a five-year low of $4.38-1/2 per bushel.
Trade uncertainties have added to market volatility. Last week, a U.S. trade court ruled President Trump’s tariffs unconstitutional, but the decision was quickly paused, adding confusion.
Meanwhile, fundamental factors show strong U.S. corn demand but expectations of growing supplies. The USDA forecasts 2025-26 U.S. corn ending stocks to increase 27% year-on-year, higher than prior estimates, though still 21% below earlier projections, leaving room for bullish scenarios if yields disappoint.
Speculators tend to respond sharply to yield risks. In 2023, a similar pattern emerged: despite forecasts of a 55% rise in corn carryout, funds turned bullish twice that summer due to weather concerns, even though the crop ultimately set a record yield.
Funds only returned to bearish positions in August 2023 and remained so until November 2024. This suggests any bullish opportunities this year may be short-lived unless adverse weather persists.
Money managers increased their net long position in soybean futures and options to 36,697 contracts by May 27, marking seven weeks of bullish sentiment. However, they trimmed net longs in soybean oil and reduced net shorts in soybean meal.
Wheat futures saw a reduction in net short positions, though Kansas City wheat shorts remain near record highs. Recent price moves showed corn down 3.4%, soybeans down 2%, wheat up 1%, soybean oil down 5.4%, and soybean meal steady.
Traders will closely monitor developments on trade tariffs, biofuel policies, U.S. weather forecasts, and crop conditions. The USDA is set to release its first soybean crop condition rating soon, which could influence market direction.
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