Grain Spreads: Fund Positioning in Corn
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Commentary
Corn finally found some support overnight ahead of the weekend and Monday's key USDA quarterly stocks and acreage report, following heavy pressure all week. The quarterly stocks report released on Monday at 11am Central often holds a surprise and is notoriously hard to forecast. The acreage report tends to be more predictable, and USDA has raised planted acreage in June from the March intentions report in each of the last 4 years. With no major planting delays this season, acreage has strong odds of coming in higher than the average guess of 95.35 million. Argentine's corn harvest is now 55% complete while Brazil is harvesting a bumper crop. Fund managers have undoubtedly shown their might within the corn sector, with money flow in corn drawing the most attention recently. In 2024, funds kicked off the year at a near 200,000-contract short, building it to the largest net short position for the year at 353,983 contracts in early July before covering some positions into harvest and the new year. To compare, funds held a 250,000-contract long at the start of 2025, which grew to 364,217 contracts by the first week of February the most bullish stance since late January 2021. However, that position had eroded to a net short of 182,282 contracts by June 24, 2025, with futures facing an 80¢ selloff during that time. We are now entering the most important yield development time for corn in the next 90 days with July seen as most important for corm. Near term weather looks ideal for production but there is some noise that the second half of July could turn significantly hotter and drier especially the western belt. We shall see. I expect managed money psychology will be to sell the rumor and buy the fact this Summer regarding any potential weather premium rally with the path of least resistance for now being lower in my opinion.
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Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
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