Speculators maintained their bullish positions on corn and soybeans in Chicago, driven by the anticipation of progress in U.S. trade talks that could potentially enhance grain exports. While U.S. farmers have begun spring planting efficiently and South American crops are looking promising, these developments are not particularly favorable for pricing. Market uncertainty persists as negotiations remain undefined, leaving traders cautious. Last week, money managers held onto a net long position in CBOT corn futures and options, although they did reduce their holdings from 124,573 contracts to 112,805.
This adjustment was notable as it included a significant increase in short positions, the largest in six months, yet it also saw a considerable number of new long positions, indicating mixed market sentiment. The soybean market also saw similar movements, with money managers increasing their net long positions by around 5,000 contracts to reach 31,067. Soybean futures remained stable over the week, but experienced a 1.3% increase over the last three trading days, reaching the highest prices since February. U.S. soybeans remain vulnerable in the event of a trade war with China, as they constitute the largest U.S. export to the country.
However, tensions have escalated as Beijing claimed that trade talks are not actively occurring, contradicting U.S. statements. Additionally, reports suggest that Brazil may enhance its soybean exports to China in 2025, primarily due to a record soybean harvest, irrespective of the ongoing trade conflict. On a bright note, Japan indicated it might consider increasing its U.S. corn and soybean imports as part of trade negotiations, offering some support to corn and soybean bulls. In the realm of soybean products and wheat, there were notable developments.
Money managers increased their net long in CBOT soybean oil while remaining bearish on soybean meal. Meanwhile, wheat has been experiencing a prolonged net short position by funds, but there have been mild net purchases recently. Traders are now closely monitoring U.S. planting progress amid recent weather changes, with average planting rates significantly lower than historical benchmarks.