Record hedge fund corn bet under pressure as prices extend losses

Corn prices are experiencing their longest losing streak since June, causing concern among hedge funds, according to a Bloomberg report. Money managers have amassed their most bullish net position in corn on record. The most-traded Chicago corn futures contract plummeted by up to 1.1% on Wednesday, extending losses into a fifth consecutive day.

This decline occurred just days after corn prices hit their highest level in three years. Commodity funds reported a record net-long corn position as of September 1, based on 20 years of Commodity Futures Trading Commission data. Hedge funds had increased their bullish exposure due to worries that adverse weather in the U.S. would harm yields, while disruptions to crop shipments from the Black Sea further fueled supply concerns.

The scale of this positioning may leave funds vulnerable if the rally continues to reverse. Corn's 14-day relative strength index recently surpassed 70, a level often considered indicative of overbought conditions. The upcoming test for the market will be on Friday when the U.S. Department of Agriculture releases its latest World Agricultural Supply and Demand Estimates.

Analysts surveyed by Bloomberg anticipate the USDA to lower its forecasts for both global and U.S. corn inventories for the 2026-27 season. Meanwhile, the U.S. harvest is accelerating. By September 6, farmers had harvested 5% of the corn crop, surpassing the pace from the same period last year, according to USDA data. The influx of additional physical supply could pose further challenges for futures, especially if the USDA's latest estimates do not bolster the bullish rationale supporting hedge funds' unprecedented positioning.