GRAINS-Corn edges higher as fund sell-off takes a breather

CANBERRA, Feb 26 (Reuters) - Chicago corn futures rose in early trading on Wednesday after falling sharply in recent sessions, as improving crop weather in Argentina and a revival of tariff concerns prompted selling by speculative investors who had amassed large long positions.

Wheat futures also snapped a run of losses but prices remained under pressure from the diminishing threat cold weather damaging Northern Hemisphere winter.

Soybeans edged higher, with all three contracts helped by a weakening U.S. dollar making U.S. exports more competitive. .DXY FRX/

FUNDAMENTALS

The most-active corn contract on the Chicago Board of Trade (CBOT) Cv1 was up 0.2% at $4.95-1/4 a bushel at 0124 GMT, with CBOT wheat Wv1 0.5% higher at $5.90-1/2 a bushel and soybeans Sv1 up 0.1% at $10.49-1/2 bushel.

Commodity funds have responded to a tightening corn supply outlook by building up a huge net long position on the CBOT, pushing prices to an 18-month of $5.13-3/4 last Friday.

But that big net long makes the market vulnerable to profit-taking and funds have been significant net sellers in recent days, traders say.

"The Managed Money keeps chasing the futures lower as new lows beget new lows," StoneX analyst Bevan Everett said in a note.

Sparking the reversal have been rains in Argentina that the Rosario grains exchange called an "inflection point" for drought-hit crops and expectations that the U.S. Department of Agriculture will at a conference this week project a rise in U.S. corn planting that would boost supply.

Analysts at JPMorgan said average trade expectations were for U.S. corn plantings to swell by 2.9 million acres from last season to 93.5 million acres, with wheat area growing by 0.6 million acres to 46.7 million acres and soybean area falling by 2.7 million acres to 84.4 million acres.

Meanwhile, U.S. President Donald Trump said proposed levies on imports from Mexico and Canada were on track to be implemented, renewing concerns that tariffs and counter-tariffs could eventually hit U.S. agricultural exports.

In wheat, a turn towards milder weather in the United States and Russia has eased fears that frost could damage crops.

Consultants Sovecon raised their forecast for 2025/26 Russian wheat exports to 38.9 million metric tons from 38.3 million tons but lowered their export forecast for 2024/25 to 42.2 million metric tons.

European Commission data showed that EU soft wheat exports are running at a much slower pace than last season but that soybean imports are larger.

MARKETS NEWS

Two major Wall Street indexes saw their fourth straight decline on Tuesday, as Treasury yields and the dollar retreated on signs of softening U.S. growth and uncertainty over Trump administration policies. MKTS/GLOB