[Reuters Analysis] Funds settle in to mega-bullish corn bets, maybe for the longer haul: Braun

NAPERVILLE, Illinois, Feb 23 (Reuters) - Whenever speculators build sizably bullish views in Chicago corn, they are not usually in a hurry to completely erase them.

In the week ended February 18, money managers increased their net long position in CBOT corn futures and options to 353,533 contracts from 332,389 a week earlier. That corresponded with a 3.6% rise in May futures CK25.

The new position is nearly identical to those from the same dates in 2021 and 2022, when May corn futures were trading around $5.50 and $6.50 per bushel, respectively. May corn in the week ended February 18 averaged just below $5.10.

Historically, the early months of the year typically feature money managers’ most bullish corn bets. February is the most popular month for the weekly fund net long to exceed 300,000 contracts, though there are no cases in July and only two in June.

Traders sometimes worry that huge net long positions leave the market vulnerable to sharp selloffs. Past data shows that the steepest corn selloffs do not immediately follow funds' most bullish positions, though sizable reductions can be made.

Waves of stronger net selling (up to 150,000 contracts over six weeks) occurred in both April and May of 2021 and 2022, which is not uncommon for that time of year.

But of the 97 weeks in the pre-2025 record in which funds’ corn net long exceeded 300,000 contracts, money managers still held a bullish position six months later in all 97 cases.

The biggest threats to this remarkable streak in 2025 include the U.S. farmer’s ability to churn out a massive corn crop and potential trade disputes between the United States and its top corn importers.

WHEAT, SOYBEANS

Speculators’ heavily bearish views in CBOT wheat could also pose risks to corn bulls, but that anomaly has lessened in the last few weeks owing to heavy short covering in wheat.

Money managers through February 18 cut their net short in CBOT wheat futures and options to a 12-week low of 61,577 contracts. That compares with 82,809 a week earlier and 110,782 three weeks earlier.

However, the February 18 fund net long in corn was nearly identical to three weeks earlier, suggesting that wheat bears, not corn bulls, were the out-of-bounds party.

CBOT May wheat WK25 reached a four-month high on February 18, though it eased more than 2% in the sessions since. Wheat traders will be eyeing exports out of top supplier Russia, as those are expected to decline in the coming weeks and months.

Briefly, money managers in the week ended February 18 reduced their net long in CBOT soybean futures and options to 16,526 contracts from 28,475 a week earlier.

They also increased their net long in CBOT soybean oil futures and options for a sixth consecutive week, predominantly on new gross longs. The new position of 53,472 contracts is their most bullish in three months.

Money managers through February 18 increased their net short in CBOT soybean meal futures and options to a four-week high of 56,993 contracts from 47,232 a week earlier. In the three sessions since, bean and meal futures rose fractionally while soyoil eased.

The U.S. Department of Agriculture later this week will reveal tentative 2025-26 U.S. supply and demand outlooks, and planting estimates will be of top interest. Most analysts expect a significant rise in corn acres from last year and a fall in soybean acres.

Karen Braun is a market analyst for Reuters. Views expressed above are her own.

Graphic- Money managers' net position in CBOT corn vs six months later https://tmsnrt.rs/3XdKrrY

Graphic- Money managers' net positions: CBOT corn vs wheat https://tmsnrt.rs/41amsv4