Doubts creep in as corn, soy net longs reduce on trade fears: CFTC

The net long position held by managed money for both corn and soybean futures contracts was marginally reduced in the week ending March 20 as doubts over potential trade disruptions disturbed an otherwise weather-driven bull narrative.  

Data from the CFTC, released late Friday, showed corn long positions cut by 10,000 lots, with corn short positions adding around the same to reduce the net length to 213,231 contracts – down 19,832 lots.

Soybean futures saw a similar move, with the long positions losing 11,913 lots while short positions gained 765 lots – a rise of 8.4% week-on-week from a low base.

That shaved the overall net length by 12,678 lots to 195,522.

The moves came as the market digested fears of potential consequences for US corn and soybean trade on the back of a deteriorating trade environment between the US and China, in the run up to US president Donald Trump signing a memorandum on March 22 applying tariffs to Chinese imports.

That disrupted an otherwise supportive narrative that continues to see Argentina's soybean and corn production slammed by poor weather, strong demand for US corn and soybean, and mounting expectations that soybean may see greater acreage than corn in the new crop seedings – a move that’s proved supportive for corn.

Wheat continued to ply familiar territory, with the soft red winter futures contract seeing its net short position increase to 56,107, largely driven by an 8,248 lot increase in short positions.

For the hard red winter contract, the net length increased by 640 lots to 29,586 as both longs and shorts reduced their overall positions, but short positions gave more ground.