Grain and Cotton Prices Slide as Funds Slash Long Positions
Heavy speculative selling plus mixed USDA demand with slightly weaker crop ratings have pushed futures lower, leaving markets exposed to sudden weather or geopolitical shocks.
Overview
- Speculative funds cut large long positions in late May with CFTC data for the week ended May 26 showing managed‑money reduced corn exposure by 87,850 contracts, amplifying downward pressure on futures.
- USDA weekly export reports were mixed with a strong corn shipments week, but an unusually large wheat net cancellation of about 807,300 metric tons reduced near‑term demand support.
- NASS crop progress on Monday showed planting mostly complete but ratings slightly below trade expectations — U.S. corn was 93% planted with a 67% good/excellent rating and soybeans 87% planted with 66% good/excellent — leaving yield risk uncertain.
- Markets registered technically bearish weekly and monthly closes into late May, contributing to follow‑through selling that pushed July corn, soy and cotton to multi‑week lows and opened the door for more chart‑based liquidation.
- Second‑order effects include weaker feed and crude links that could pressure livestock margins and ethanol demand, and a new world screwworm case near the U.S. border that raises animal‑health concerns for cattle producers.