The Grain Markets Face a Tough Week Amid Massive Fund Selling, Experts Say
The grain markets continued their downward trajectory this week, marked by heavy selling activity from funds, analysts report. On Thursday, both old and new crop corn futures plunged to new contract lows before rebounding somewhat, while winter wheat futures and soybean prices also declined to fresh lows for the move.
Kevin Duling, a market analyst at KD Investors, explained that the persistent fund selling is a key driver behind the bearish trend. “Funds continue to exit grain markets aggressively,” Duling said. “Both classes of winter wheat futures pushed below the June lows, and soybean futures fell beneath important technical indicators, including the 100-day and 200-day moving averages.” He noted that current soybean prices trade below levels seen even before the Environmental Protection Agency (EPA) proposed supportive blending mandates for biomass-based diesel.
Several factors have contributed to this selloff. The absence of immediate weather concerns has removed a potential bullish catalyst, but broader market dynamics are playing a larger role. “There’s a lot of politics affecting these grain markets right now, which keeps the money flow moving out and encourages trend-following funds to remain short and continue selling,” Duling said. He added that the funds appear relatively unconcerned about risks of a July heat ridge, a traditional factor that could support prices.
Volatility in other commodity markets has spilled over, adding to bearish pressure on grains. Notably, crude oil experienced a dramatic swing, with a $5 per barrel rise followed by a $5 decline on Monday alone. “That kind of a move shouts money flow,” Duling explained. “When crude oil drops sharply, it generally pulls other commodities down with it, including grains.”
Despite the selling pressure, Duling pointed out that the grain markets are technically oversold heading into the end of June, the end of the quarter, and ahead of Monday’s U.S. Department of Agriculture (USDA) Acreage and Quarterly Stocks reports. These reports often generate market reaction, sometimes triggering short covering rallies. “In the old days, we definitely would have expected a rally under these conditions,” he said. However, he also cautioned that the unprecedented level of open interest and widespread fund positioning could limit how much of a bounce occurs.
Duling identified key support levels that he expects will hold in the near term: $4 per bushel for corn, $10 for soybeans, and $5 for winter wheat. He suggested that any further price declines would require notably bearish USDA reports but expressed hope that positive developments such as unfavorable weather, strengthening demand linked to trade agreements, or progress in U.S.-China trade talks could spark a turnaround.
Looking ahead, market watchers will be closely monitoring the USDA’s Acreage and Quarterly Stocks reports due Monday for fresh guidance on supply and demand fundamentals. Meanwhile, ongoing geopolitical and macroeconomic factors continue to weigh heavily on grain markets, making price swings likely over the coming weeks.
Beyond market analysis, other notable agricultural news includes calls from over 250 agricultural groups urging the current administration to include farmers and ranchers in policymaking related to the MAHA Commission’s work and Brazil’s recent approval to increase ethanol blending levels in gasoline, among other topics shaping the agricultural landscape.
Farmers, traders, and agribusiness professionals are advised to stay tuned to evolving market conditions and reports in the coming days amid this turbulent period for grain markets.
For ongoing updates and expert analysis on grain markets and beyond, visit AgWeb and follow market commentators such as Kevin Duling and Michelle Rook.
— Smart Money Mindset, June 26, 2025