Large Speculative Liquidation Sends U.S. Grain and Livestock Markets Reeling

Overview

• Managed‑money funds sharply cut net long positions in the week ending May 26, cutting corn by 87,850 contracts to about 205,504, soybeans by 18,252 to about 189,552 and lean hogs by 20,728 to about 12,985, a move traders say has driven recent volatility.
• USDA export and shipment reports show active demand for corn and soybeans with FGIS corn shipments at 1.728 MMT for the week ending May 28 and steady weekly soybean inspections, which are cushioning prices against the fund liquidation.
• USDA NASS crop progress released May 31 showed U.S. corn 93% planted with an initial 67% good/excellent rating, below analyst expectations and leaving markets sensitive to weather and rating updates as the crop develops.
• Livestock supplies are tighter than a year ago with USDA slaughter estimates showing lower cattle and slightly lower hog slaughter, and the USDA APHIS report recording 1,981 active New World Screwworm cases in Mexico that include clusters near the U.S. border and could disrupt regional packing and trade flows.
• Market watchers say the mix of rapid speculative selling, solid export flows and evolving supply risks — including a reported USDA expectation that China has begun placing orders against a 25 MMT soybean commitment — will keep futures volatile and make upcoming weekly export and crop updates key to price direction.