The report highlights that the recent sharp liquidation in corn speculative positions has created an overdone selloff. Despite near-term cooling, significant supply risks from El Niño, US drought, and Brazil's fertilizer procurement challenges remain.
Key Takeaways
- 1.Managed money net speculative longs dropped 88% in three weeks, leading to a corn price correction, but supply risks remain deferred.
- 2.A potential $17bn US-China agricultural deal, if implemented, is expected to surge Chinese imports of US corn from zero to 16mn t annually by 2027-28.
- 3.El Niño and fertilizer supply constraints in Brazil threaten to reduce 2026/27 first-crop corn yields by 10%.
Table of Contents
- Ag markets hit by sharp spec long liquidation
- Corn market cools, but risks simmer beneath
- Weather risk premium has been stripped out too early
- Brazil fertilizer supply remains a concern
- US-China $17bn deal could upend the market
- Risk-off, but not risk-free
- Ag complex sees a sharp long liquidation move
- Corn tumbles alongside speculative long unwinds
- President Trump has negotiated the ags deal with China
- US corn is now planted and at the mercy of Mother Nature
- Nebraska's poor ratings reflect tight moisture availability in topsoil
- Phosphates affordability and availability are compounding risks to the new crop
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Authors
Daryna KovalskaFrancisco BlanchMichael Widmer
Securities
CornWheatSoybeans
Themes
El Niño Climate RiskGeopolitical Supply Chain Disruption (Hormuz)US-China Trade Relations
Regions
GlobalUnited StatesBrazilChina