Corn Futures Spooked by Tariffs Sent Bulls Running for the Hills
An imminent trade war between the United States and its two largest agricultural trading partners sent bullish Chicago corn speculators running for the hills last week. Most-active CBOT corn futures plunged 8.6% in the week ended March 4, their biggest such downturn since mid-2023. The market reaction was harsh, especially with Mexico the top destination for U.S. corn. Money managers during the week slashed their net long in CBOT corn futures and options to 219,752 contracts from 337,454 a week prior.
- This record purge of bullish bets highlights the vulnerability of agricultural markets to global trade tensions, which can quickly turn on a dime, forcing market participants to reassess their positions.
- As investors struggle to gauge the impact of tariffs on corn prices, they may need to revisit their fundamental analysis of supply and demand dynamics in the face of rapidly changing policy landscapes.