(The opinions expressed here are those of the author, a market analyst for Reuters.)

NAPERVILLE, Illinois - After building super-bullish bets a few weeks ago, speculators have swiftly ducked back from the Chicago corn market with geopolitical risks still very much in focus.

The United States plans to impose sweeping reciprocal tariffs on multiple trade partners on April 2. Pivotal but often-unpredictable U.S. planting survey results are set to land on March 31, and these upcoming events have investors in risk-off mode.

In the week ended March 18, money managers reduced their net long position in CBOT corn futures and options to a 15-week low of 107,270 contracts from 146,541 a week earlier.

In fact, they have dumped more than 230,000 corn contracts on the net over the latest three weeks. This is by far a record selloff for funds when starting from such a bullish position, as those are not usually discarded quickly.

Exiting longs accounted for three-fourths of this move, suggesting the selloff is not necessarily a fully bearish gesture. However, new gross shorts slightly outpaced exiting longs in the latest week.

Corn traders are bracing for potentially huge U.S. corn plantings this year, and brewing trade conflicts between the United States and its top agricultural trade partners have not helped. This includes Mexico, the leading U.S. corn destination.

Tariffs have already been escalated between the United States and its top soybean buyer China, which has purchased relatively low volumes of the U.S. oilseed over the last year.

Money managers in the week ended March 18 extended their net short position in CBOT soybean futures and options to 22,005 contracts from 15,544. The new position is similar to the same date in 2020 but far less bearish than a year ago.

Soybean harvest in top exporter Brazil is moving at a strong pace after a slower start. This will be welcome for China, whose soy stocks have thinned.

Top soymeal exporter Argentina's soybean harvest is looking to be more of an average one, likely a much better outcome than might have been expected a couple months ago amid a hot, dry spell.

Money managers were net buyers of CBOT soybean meal futures and options for a second consecutive week through March 18, reducing their net short to 61,013 contracts from 85,344 two weeks earlier. But this remains a heavily bearish stance.

Funds were net sellers of CBOT soybean oil for a fourth straight week, establishing a net short of 27,609 futures and options contracts as of March 18. That compares with a net long of 9,669 two weeks earlier.

The enormous selloff in corn means that funds' bearish wheat views no longer look out of place by comparison. The managed money net short in CBOT wheat futures and options sat at 80,668 contracts as of March 18, up slightly on the week and in line with a multi-week average.

Black Sea wheat and other agricultural exports will come back into focus on Monday, when Russian and U.S. officials will discuss ways to ensure the safety of transportation in the area. This is part of a larger U.S.-led effort at a peace settlement in Ukraine.

Traders this week will also be watching for any possible tariff news ahead of the April 2 deadline, but the March 31 U.S. Department of Agriculture reports are next on the radar. Karen Braun is a market analyst for Reuters. Views expressed above are her own.

(Writing by Karen Braun; Editing by Richard Chang)


Reuters