By Kirk Maltais

-- Corn for May delivery rose 1.9% to $4.21 1/2 a bushel on the Chicago Board of Trade on Monday, as grain traders saw little room for fund traders to add new short positions after the CFTC reported a net short among managed money of roughly 340,000 contracts, the highest since spring 2019.

-- Wheat for May delivery rose 0.9% to $5.74 a bushel.

-- Soybeans for May delivery rose 0.2% to $11.43 1/2 a bushel.


Mulling the Bottom: Grain traders and analysts had been projecting CBOT grains to test new lows until the start of March, which comes on Friday.

However, corn didn't seem to get the message, with the most-active contract rising Monday afternoon and taking soybeans and wheat with it.

Corn may have run out of space to fall, said John Payne of Hedgepoint Global. "It's going to be tough to find new short-term sellers," he said.

As a result, the large short position in corn, which registered a record short position among grain traders over the weekend, may soon turn around.

"Be ready for a snap back," said Payne.

End of Month: The idea that funds have hit their limit in adding short positions wasn't universally accepted as the main reason for Monday's rebound.

"I would conclude it's premature to say the shorts are exhausted," said Brian Hoops of Midwest Market Solutions. "I believe it's a function of the delivery period on Wednesday night/Thursday as traders exit March positions."

Hoops said the bottom for grain prices may not be set yet, although he adds that it should be "close."


Head Office: Concerns about a government shutdown were a source of pressure for CBOT grain prices, and may continue to be a weight throughout the week. A shutdown looming for this weekend has the potential to halt sales and disrupt farming operations ahead of the spring planting season.

"Traders are also now concerned that the U.S. government will partially close as lawmakers struggle to find a budget deal to fund departments and agencies prior to the weekend," said Daniel Flynn of Price Futures Group in a note.

The unavailability of U.S. crops on the world market may force buyers to buy their exports from other nations, which may add to ending stocks in the U.S.

Adding Risk: Analysts and traders are starting to reassess the need for risk premium for U.S. crops.

"We are at the very front edge of planting risk for the new crop in the U.S., so some fund covering seems reasonable," said Sterling Smith of AgriSompo.

Much has been made of large net shorts held in grains among fund traders, as well as improving South American weather. Even so, the potential for an adverse spring in the U.S. doesn't appear to be present in current CBOT futures, which may change in the coming days and weeks.

A Good Look: The pace of export inspections for U.S. corn is nearly double of where it was last year, the USDA says. For the week ended Feb. 22, corn inspections totaled 1.24 million metric tons, which is nearly double the 649,303 tons reported by the USDA for this time last year. The total is also up from this time last week, when inspections totaled 1.05 million tons.

In the current marketing year, corn inspections have totaled 19.49 million tons. That is up nearly 36% from the previous marketing year.

For corn, this is seen as supportive news to aid corn's turnaround from being heavily shorted.


-- The EIA is scheduled to release its weekly ethanol production and stocks report at 10:30 a.m. EST Wednesday.

-- The USDA is due to release its weekly export sales report at 8:30 a.m. EST Thursday.

-- The USDA is scheduled to release its monthly agricultural prices report at 3 p.m. EST Thursday.

Write to Kirk Maltais at

(END) Dow Jones Newswires

02-26-24 1604ET