Speculators continued to uphold a significant short position in Chicago corn futures, contrasting with recent data revealing fewer corn acres planted by U.S. farmers than anticipated. In the week ending March 26, money managers marginally increased their net short positions in CBOT corn futures and options to 251,730 contracts from 242,988 in the previous week, primarily driven by the addition of new gross short positions.
Although this figure is notably lower than the record of 340,732 contracts set five weeks earlier, it still reflects a highly bearish sentiment, making investors susceptible to potential bullish market developments. The latest U.S. Department of Agriculture report unveiled corn plantings nearly 2% below the average trade estimate, prompting a robust 3.6% surge in most-active CBOT corn futures, marking their strongest performance in months. The current positioning of funds in corn resembles that of early 2019 when record short positions were established in March and April.
However, unlike the bearish outcomes of March 2019, this year’s data revealed smaller-than-expected corn stocks and a more optimistic planting scenario. In contrast, money managers reduced their net short positions in CBOT soybeans in the same period, trimming them to 134,780 contracts from 148,339 a week earlier. Despite U.S. soybean plantings aligning with expectations and slightly larger quarterly stocks, CBOT soybean futures experienced marginal declines post-report release. The threat of dry weather in key Brazilian corn-producing regions has raised concerns, as the crucial second crop approaches a critical growth phase.
While Brazil and Argentina are not expected to achieve record crop yields this year, Argentina’s corn production may present a competitive outlook. In a separate development, money managers shifted to a net long position in CBOT soybean oil futures and options after holding a net short position in previous weeks, reflecting changing sentiment in the soybean oil market amidst evolving market conditions.