As the corn market gears up for pivotal reports from the U.S. Department of Agriculture, recent trends indicate a shift in investor sentiment. Traditionally, speculators maintain a strong bullish stance on Chicago corn futures for extended periods, but this time, signs of bearishness are emerging. After a period of global trade uncertainties, many investors are now reevaluating their positions, leading to notable corn selling activities.

Declining Bullish Bets on Corn Futures

In the week leading up to May 6, money managers significantly reduced their net long positions in CBOT corn futures and options, dropping from 71,329 contracts to just 13,893. This marks the lowest bullish sentiment seen in the past six months, especially when contrasted with the year’s peak of over 360,000 contracts. During this timeframe, the most-active corn futures fell by 3.1%, followed by an additional 1.3% drop from Wednesday to Friday.

• Key Stats:
  • Net long positions: 13,893 contracts
  • Previous week: 71,329 contracts
  • Yearly high: 360,000 contracts

Speculators are now entering this week with a net short position in corn, anticipating that the USDA’s upcoming report will project U.S. corn ending stocks for 2025-26 at around 2 billion bushels, a 40% increase from the previous year.

Wheat Market Dynamics

On the wheat front, money managers have decreased their net short positions in CBOT wheat futures and options, yet their outlook remains decidedly bearish, currently at 113,734 contracts. Russian wheat continues to dominate the export market, keeping global prices relatively stable. The most-active CBOT wheat futures recently hit their lowest settlement point since August 2020.

• Market Insights:
  • Russian and Ukrainian wheat harvests may not be as strong this year, which could strain global supplies into 2025-26.
  • However, a retreat from China as a major grain importer has alleviated some pressure on supply concerns.

Despite potential challenges, extreme heat in China’s wheat-producing areas has sparked some import activity from Australia and Canada, with 2025-26 global wheat stocks expected to remain largely unchanged from the previous year.

Soybean Futures: Shifting Positions

In the soybean market, money managers have also adjusted their net long positions in CBOT soybean futures and options, reducing them to 21,870 contracts from 38,202 a week prior. With July futures experiencing a 1% increase over the last few sessions, there’s speculation that funds may still lean towards a bullish outlook.

• 2025-26 Projections:
  • U.S. soybean supplies are expected to mirror those of 2024-25.
  • Global stocks are likely to rise, particularly as Brazil anticipates its 19th consecutive year of expanding planted areas.

The demand from China remains unpredictable, especially as the country’s economic growth slows. This stagnation in Chinese soybean usage, coupled with a bumper crop in Brazil, could influence future trade dynamics between the U.S. and China.

Soybean Products: Record Short Positions

Turning to soybean products, money managers extended their net short positions in CBOT soybean meal futures and options to an all-time high of 103,457 contracts as of May 6, despite some new long positions entering the market. Additionally, net long positions in CBOT soybean oil futures and options decreased to 56,738 contracts from 63,387 the previous week, ending a five-week streak of net buying, which had been buoyed by strong export demand for U.S. soyoil.

According to USDA’s preliminary projections for 2025-26, U.S. soybean meal exports are expected to remain robust as processing capacity continues to expand, with soybean oil exports anticipated to follow suit.

In summary, as speculators navigate the evolving landscape of corn, wheat, and soybean futures, significant shifts in market positions suggest a cautious outlook heading into the USDA reports. Investors are keenly watching how these dynamics will unfold in the coming weeks.