Grain Funds Take Record Long Position Amid Escalating Conflicts

Funds are estimated to have added length to their grain spreads once again, buying 35,000 corn contracts today and taking their net position to a record 454,000 contracts. This surpasses the previous record of 429K set in 2010. The price of December corn futures last traded at this level in July 2023.

Crop conditions yesterday showed no change in corn, with 57% of fields remaining Good/Excellent while Poor/Very Poor conditions persist in the western Corn belt. Despite this, funds are unlikely to give up their positions due to their increasing exposure across food and energy sectors.

The escalating conflicts in Russia/Ukraine and Iran threaten commodity logistics, particularly in regions rich in energy and food resources. As de-escalation hopes fade, grain prices and crude oil (WTI) have risen above $90 per barrel.