Corn and Wheat Markets: A Tale of Two Extremes – Braun’s Unconventional Play in 2025

The world of agricultural commodities is rarely static, but 2025 has brought a level of volatility not seen in decades. Karen Braun’s analysis of CBOT corn and wheat fund positions reveals a stark divergence in speculative sentiment—one that has reshaped market dynamics and left investors navigating uncharted territory. From record bullish bets on corn to relentless bearishness in wheat, the past six months have tested even the most seasoned traders.

Corn: A Bull Run, Then a Brutal Reversal

By late December 2024, funds had piled into CBOT corn futures, amassing a 228,806-contract net long position—their most bullish stance since February 2023. This surge reflected optimism around strong U.S. demand, shrinking global inventories, and South American weather risks. Corn futures climbed to $5.10 per bushel by February, fueled by expectations of robust ethanol production and export demand.

But the euphoria was short-lived. By March, panic set in. Funds slashed their net long positions by 280,000 contracts in five weeks, dropping to just 74,607 contracts by late March—the steepest retreat since 2016. The trigger? A perfect storm of U.S. trade tariffs on Mexico, Canada, and China, coupled with fears of record U.S. corn plantings.

The price collapse was swift: corn futures fell to $4.42 per bushel in mid-March—the lowest since December 2024—before stabilizing slightly. Analysts now question whether the USDA’s April 1 planting report will confirm a supply glut or revive bullish narratives.

Wheat: Bearishness Unleashed, No Relief in Sight

While corn’s rollercoaster dominated headlines, wheat faced its own crisis. Funds entered 2025 with a net short position of 86,762 contracts—the most bearish year-end stance since 2018—and doubled down by March. Net shorts hit an eight-week high of 92,587 contracts, pushing wheat to a five-month low of $5.28-1/4 per bushel.

The culprits? Structural oversupply from Russia and a strengthening U.S. dollar, which eroded export competitiveness. Even short-covering rallies in February failed to dent the bearish momentum.

The Unseen Elephant: Trade Wars and Supply Realities

The dramatic shifts in fund positions cannot be separated from geopolitical and macroeconomic forces:
1. Trade Policy Uncertainty: U.S. tariffs on Mexico, Canada, and China—accounting for 50% of U.S. agricultural exports—have stifled demand. A deadline for reciprocal tariffs looms in April, adding pressure to prices.
2. Supply Gluts and Planting Intentions: Record U.S. corn plantings (projected at 94.36 million acres) and Brazil’s bumper soy harvest have flooded global markets. Meanwhile, Argentine droughts briefly buoyed soy prices but did little to support wheat.
3. Historical Precedent: Braun notes the 431,303-contract gap between corn’s bullish bets and wheat’s bearish shorts in February—the largest disparity since 2006. Past extremes, like 2016 and 2023, were followed by sharp corrections. This time, tariffs and low corn-wheat price spreads (77.5 cents/bushel, a 14-year low) complicate forecasts.

Looking Ahead: Risks and Opportunities

Investors must weigh two critical questions:
- Will corn’s oversupply fears outweigh demand resilience? The USDA’s April 1 report will clarify U.S. ending stocks and planting data. A bullish surprise could spark a rebound, but tariffs and weather risks remain wildcards.
- Can wheat’s bearish cycle be broken? A slowdown in Russian exports or a weaker dollar could help, but structural oversupply persists.

Conclusion: Navigating the New Normal

The past quarter has underscored a truth for commodity traders: extremes breed corrections. Corn’s historic bullishness in February was unsustainable given the tariff risks and planting forecasts. Wheat’s bearishness, while justified by oversupply, may face a ceiling if global demand stabilizes.

With 280,000 contracts erased from corn’s net long position in five weeks and wheat shorts hitting decade lows, the market’s message is clear: caution and diversification are paramount. Investors should monitor the USDA’s April 1 report closely and remain agile—whether capitalizing on corn’s potential rebound or hedging against wheat’s prolonged slump.

In 2025, Braun’s analysis isn’t just about positions; it’s a reminder that in agriculture, the only constant is change.