Chicago | Reuters—Benchmark U.S. corn futures fell nearly three per cent on Monday as worries about trade tensions and ample South American harvests appeared to spur commodity funds to liquidate more of their large net long positions, traders said.
Soybean and wheat futures turned lower as corn futures sagged.
Chicago Board of Trade corn Cv1 settled down 13-1/4 cents at $4.56-1/4 per bushel after hitting $4.54-1/2, the lowest on a continuous chart since January 9. CBOT soybeans Sv1 ended down 14-1/4 cents at $10.11-1/2 a bushel and wheat Wv1 fell 8 cents to finish at $5.47-3/4 a bushel.
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U.S. President Donald Trump said that 25 per cent tariffs on goods from Mexico and Canada will definitely take effect on Tuesday, raising fears of a trade war in North America and sending financial markets reeling.
Meanwhile, China is targeting American agricultural exports as it prepares countermeasures against fresh U.S. import tariffs, China’s state-backed Global Times reported.
China is by far the world’s largest soybean buyer and Mexico is a major buyer of U.S. soybeans, corn and wheat.
In Brazil, farmers are roughly halfway through the harvest of what is projected as a record-large soybean crop.
“(South American) supplies are set to overwhelm the global marketplace regardless of any localized crop concerns, and the trade is reflecting that export issue right now. Lingering tariff talk just adds more fuel to that fire,” StoneX senior market analyst Matt Zeller wrote in a client note.
Commodity funds hold a hefty net long position in CBOT corn futures, leaving that market particularly vulnerable to bouts of long liquidation.
Traders shrugged off news that the U.S. Department of Agriculture confirmed private sales of 114,000 metric tons of U.S. corn to Mexico.
News of a large Australian wheat crop added to bearish sentiment. The Australian government raised its estimate of the country’s 2024/25 wheat crop to 34.1 million metric tons, up 2.2 million from its previous estimate of 31.9 million, released in December.
—Additional reporting by Michael Hogan in Hamburg and Naveen Thukral in Singapore
