(The opinions expressed here are those of the author, a market analyst for Reuters.)

NAPERVILLE, Illinois - Speculators have been busy stuffing their bullish Chicago corn bets to the brim, but last week they gave soybeans a nod of confidence for the first time in over a year.

Tightening global corn supplies have had investors’ attention for months, though it has recently become apparent that soybean stocks later this year may not be as ample as previously thought.

The U.S. Department of Agriculture on Jan. 10 revealed that the 2024 U.S. corn and soybean harvests were substantially smaller than analysts expected, causing an enormous round of short covering in CBOT soybeans.

That helped establish a managed money net long position of 34,833 CBOT soybean futures and options contracts as of Jan. 14. That compares with a net short of 28,612 contracts a week earlier, and it is funds’ first bullish bean view since December 2023.

Short covering was responsible for 71% of funds’ latest move in soybeans, but they also added a handful of gross longs, the most for any week since last May.

Most-active CBOT soybean futures jumped 5% in the week ended Jan. 14, though they eased 1.3% in the last three sessions.

Despite bullish factors such as the smaller U.S. soy numbers, dry weather in top soymeal exporter Argentina, and some hiccups to start Brazil’s soy harvest, global soybean production and ending stocks are both set for new record highs in 2024-25. This will be among soybean bulls’ biggest challenges.

However, USDA pegs global 2024-25 corn ending stocks at a decade low. The agency’s latest round of reports caused CBOT corn futures to gain 3.6% in the week ended Jan. 14.

Corn added another 2.1% in the following three sessions, topping at $4.85 per bushel on Friday, the most-active contract’s highest since mid-December 2023.

As of Jan. 14, the managed money net long in CBOT corn reached 292,228 futures and options contracts, their most bullish stance since May 2022. About two-thirds of that move owed to new gross longs.

There are only three years where funds were more bullish toward corn in January: 2011, 2021 and 2022. A year ago this week, they carried a heavy net short of around 261,000 contracts.

Open interest in CBOT corn futures and options surged a massive 11% in the week ended Jan. 14. It now exceeds 2.37 million contracts, the most for any week since June 2021 and well above average for the date.

Open interest in CBOT soybean futures and options gained 4% in the week ended Jan. 14 and is the month’s second highest ever after 2021. But the latest reading of 1.05 million contracts is down nearly 18% from the recent peak in October.

Weather forecasts as of Monday were mixed on much-needed rainfall for parched Argentine corn and soy crops, and traders have begun closely monitoring the early stages of Brazil’s soybean harvest.

But all eyes this week will be on U.S. President Donald Trump, who was sworn into office on Monday. Trump has pledged swift action on his policies, which may include tariffs against multiple U.S. trade partners, potentially threatening U.S. agricultural exports. Karen Braun is a market analyst for Reuters. Views expressed above are her own.

(Editing by Muralikumar Anantharaman)