U.S. corn futures pressured as OPEC+ unveils plans to boost production
Corn led U.S. grain losses Monday on the CBOT, falling 3.1% as OPEC+ announced a June oil output hike. Crude oil’s drop pressured corn and soybeans, tied to ethanol demand. Traders also reacted to slow progress on trade deals and expectations of fast U.S. planting. Money managers slashed corn longs and pushed wheat shorts to a two-year high.
Corn led U.S. grains lower Monday on the Chicago Board of Trade after OPEC+ announced plans to raise oil production by 411K bbl/day in June.
Corn and soybeans are often linked to movement in the oil market due to the use of ethanol for gasoline blends, and crude oil prices plunged Monday.
“Bottom line to me is that the next leg lower comes from the physical market being caught long from too much oil in the market, as positioning to me is very short,” Scott Shelton of United ICAP wrote.
Analysts also cited say a growing feeling that markets want proof of the nearly completed trade deals mentioned by President Trump and cabinet officials such as Treasury Secretary Bessent, with at least some indication that progress is being made.
CBOT grain futures also were said to feel pressure from expectations that the U.S. Department of Agriculture will report that U.S. farmers made sizable progress in getting their crops into the ground.
In the week ended April 29, money managers raised their net short position in CBOT wheat futures and options to a two-year high of 121,415 contracts, compared to ~90K in the previous week, representing funds’ largest weekly selloff in CBOT wheat since 2017, mostly the result of new short bets, according to Friday’s CFTC Commitment of Traders report.
Money managers also staged a relatively large selloff in CBOT corn futures and options through April 29, slashing their net long to 71,329 contracts vs. 112,805 a week earlier.
On Monday’s trading at the CBOT corn (C_1:COM) for July delivery closed -3.1% to $4.54 1/4 per bushel, wheat (W_1:COM) for July delivery ended -2.2% to $5.31 per bushel, and soybeans (S_1:COM) for July delivery settled -1.1% to $10.46 per bushel.
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Source : Seeking Alpha
