Corn prices fall as funds unwind long positions amid trade concerns
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Chicago corn futures extended their recent decline on Wednesday as favorable crop conditions in Argentina and renewed tariff concerns triggered speculative selling. After surging to an 18-month high of $5.13¾ per bushel last Friday, corn prices have since pulled back, with the most-active CBOT contract slipping to $4.94 per bushel. The sharp reversal has been fueled by profit-taking from commodity funds, which had aggressively built up net long positions in response to tightening supply expectations.
The shift in sentiment comes as rainfall in Argentina has eased supply concerns, while traders anticipate that the U.S. Department of Agriculture (USDA) will soon project an increase in U.S. corn acreage. JPMorgan analysts expect U.S. corn plantings to rise by 2.9 million acres to 93.5 million acres, adding to supply-side pressures. Additionally, former President Donald Trump’s recent comments on potential tariffs on imports from Mexico and Canada have raised fears that U.S. farm exports could face new trade barriers, further weighing on sentiment.
Elsewhere in the grain markets, wheat futures held steady at $5.87¾ per bushel after a series of declines last week. Warmer weather has reduced the risk of frost damage to winter crops in the Northern Hemisphere, limiting immediate upside for wheat. However, analysts see a more constructive medium-term outlook, with Russia expected to produce a smaller crop than last year and global demand remaining strong. According to Ole Houe of IKON Commodities, while physical wheat supplies are currently abundant, prices are gradually firming as the market tightens.
Soybeans also struggled, falling 0.3% to $10.45¼ per bushel, pressured by Brazil’s ongoing record harvest. The expansion of Brazilian soybean output continues to weigh on prices, overshadowing concerns about reduced U.S. acreage, which is projected to drop by 2.7 million acres to 84.4 million acres.
Looking ahead, corn prices may face further downside pressure, with analysts suggesting that current CBOT levels remain overvalued. Without a renewed supply shock or shift in trade dynamics, speculative selling could continue to dominate the market in the near term.
The shift in sentiment comes as rainfall in Argentina has eased supply concerns, while traders anticipate that the U.S. Department of Agriculture (USDA) will soon project an increase in U.S. corn acreage. JPMorgan analysts expect U.S. corn plantings to rise by 2.9 million acres to 93.5 million acres, adding to supply-side pressures. Additionally, former President Donald Trump’s recent comments on potential tariffs on imports from Mexico and Canada have raised fears that U.S. farm exports could face new trade barriers, further weighing on sentiment.
Elsewhere in the grain markets, wheat futures held steady at $5.87¾ per bushel after a series of declines last week. Warmer weather has reduced the risk of frost damage to winter crops in the Northern Hemisphere, limiting immediate upside for wheat. However, analysts see a more constructive medium-term outlook, with Russia expected to produce a smaller crop than last year and global demand remaining strong. According to Ole Houe of IKON Commodities, while physical wheat supplies are currently abundant, prices are gradually firming as the market tightens.
Soybeans also struggled, falling 0.3% to $10.45¼ per bushel, pressured by Brazil’s ongoing record harvest. The expansion of Brazilian soybean output continues to weigh on prices, overshadowing concerns about reduced U.S. acreage, which is projected to drop by 2.7 million acres to 84.4 million acres.
Looking ahead, corn prices may face further downside pressure, with analysts suggesting that current CBOT levels remain overvalued. Without a renewed supply shock or shift in trade dynamics, speculative selling could continue to dominate the market in the near term.