The United States Department of Agriculture (USDA) published its February World Agricultural Supply and Demand Estimates (WASDE) report on Tuesday this week, which many traders expected to present a very bullish picture for world grains, particularly corn.

Last week’s record US corn sales to China coupled with adverse South American weather over the past month, which has impacted on corn production prospects for Argentina and Brazil, encouraged further buying. Prior to the publication of the WASDE report, these circumstances had taken US Chicago Board of Trade (CBOT) corn futures to new contract highs; the highest for 7.5 years.

However, the USDA presented data which failed to meet the bullish trader expectations and triggered a spell of notable long liquidation in corn and wheat futures markets. It is estimated the speculative funds sold 55,000 CBOT corn contracts, representing 15% of their long position and values 10% below their Tuesday high.

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