Weather, geopolitics, and policy drive divergence in CBOT grain futures.

On May 23 (Friday),Relationship between foreign exchange dealers and brokers the CBOT grain futures market continued its divergent pattern, influenced by geopolitical, weather disturbances, export demand, and policy expectations. Major agricultural products showed distinctly different paths. From short-term position changes and global fundamental trends, grain futures may still seek direction amidst volatility.

Wheat: Bearish Return, Rebound Momentum Weakens

CBOT wheat futures fell slightly by 0.14% on Friday, closing at $5.44 per bushel, although they recorded a 3.6% weekly gain. However, the bearish sentiment in the market has intensified again. On May 22, funds increased net shorts by 3,500 contracts, indicating cautious sentiment returning in the short term.

Recent U.S. export data has been impressive, with net sales reaching 882,000 tonnes in one week, the highest in nearly six months, but the global wheat supply remains ample. The International Grains Council (IGC) maintained its 2025/26 production estimate at 806 million tonnes. Russia's removal of minimum export quotes has further pressured price expectations. Although Argentine rains temporarily supported prices, upcoming dry weather may ease planting concerns.

From a technical perspective, wheat is likely to oscillate between $5.40-$5.50 per bushel. If tensions between Russia and Ukraine worsen or South American weather deteriorates, a short covering rally could test the $5.60 level.

Soybeans: Bullish Sentiment Rises, Weather Supports Strong Pattern

U.S. soybean futures rose by 0.28% on Friday, closing at $10.69-3/4 per bushel, with a weekly gain of nearly 2%. This week, funds significantly increased net long positions, net buying 11,000 contracts over the past five days, reflecting an enhanced bullish sentiment in the market.

Fundamentally, U.S. soybean exports remain robust, and reduced Midwest rainfall may delay planting progress, supporting price levels. Argentine rains have also exacerbated yield reduction expectations, boosting Brazilian soybean premiums and indirectly lifting CBOT prices.

In the short-term technical picture, soybean support is solid. If adverse weather persists, prices may test the $11.00 per bushel level. However, long-term demand remains uncertain, potentially limiting the price upside, requiring monitoring of South American export pace and Chinese purchasing trends.

Soybean Oil: High Volatility Amid Policy Tug-of-War

Soybean oil futures rose by 1.34% on Friday, showing strong performance underpinned by biofuel policies. The U.S. government's extension of the 45Z fuel tax credit boosted market sentiment, with funds net buying for five consecutive days, showing a strong short-term bullish atmosphere.

However, high inventory levels and weak global crude oil pose potential pressure, with factors such as expanded import losses in India and increased discounts on Malaysian palm oil weighing on prices. In the short term, soybean oil is expected to oscillate between 44.00-45.00 cents per pound. If adverse tax impacts materialize, it might test the 43.00 cents support area.

Soybean Meal: Technical Buying and Low Inventory Support Firmness

Despite a slight 0.44% decline this week, soybean meal's overall trend remains resilient. Strong U.S. soybean meal export data, Argentine weather, and low domestic inventory continue to provide bottom support for the prices.

Holding data shows increased short-term fund accumulation sentiment, and the declining oilmeal ratio also provides relatively bullish support for soybean meal. CBOT soybean meal is expected to run strongly between $360-$370 per short ton. If inventory recovery falls short of expectations, it might even challenge the $380 level.

Corn: Steady Amidst Supply-Demand Tug-of-War, Short-Term Support Strengthens

Corn edged up by 0.16% on Friday, closing at $4.63-1/2 per bushel, with a weekly surge of 4.5%. Although fund net shorts stand at 49,000 contracts, reflecting an overall bearish stance, short-term short-covering and favorable basis provide support.

Planting progress and export data are key future market variables. If rainfall in the U.S. Midwest reduces planting pressure while export orders improve, it may drive corn to further test the $4.70 resistance level.

Market Outlook:

The CBOT grain market is expected to maintain a structurally divergent pattern of "strength among weaknesses" among different varieties:

• Wheat: Narrow oscillation between $5.40-$5.50 per bushel; watch for geopolitical risk catalysts;
  
• Soybeans: Technical and weather support to test $11.00, but long-term upside still requires fundamental support;
  
• Soybean Oil: Policy expectations dominate, short-term high volatility, high inventory limits gains;
  
• Soybean Meal: Low inventory + good technical picture, overall firm operation;
  
• Corn: Strong basis, planting progress is key, short-term still has upward space.
  

Future trends still need to focus on: U.S. weather changes, export trends, policy adjustments, and evolving geopolitical situations influencing market sentiment.

Risk Warning and Disclaimer

The market carries risks, and investment should be cautious. This article does not constitute personal investment advice and has not taken into account individual users' specific investment goals, financial situations, or needs. Users should consider whether any opinions, viewpoints, or conclusions in this article are suitable for their particular circumstances. Investing based on this is at one's own responsibility.

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