Speculators had prepared for the price-negative data in a key grains report on Friday, increasing their short positions in corn and soybeans, and turning hopes to soft commodities instead.

Managed money, a proxy for speculators, cut its net long exposure to Chicago corn futures and options by more than 15,300 contracts to 125,645 contracts, the lowest since summer last year, US regulatory data revealed.

"Corn saw the most bearish change," Standard Chartered analyst Kuon-Ken Lee said.

In soybeans, their net short exposure – meaning bets on price falls exceed those on rising values – increased by nearly 2,750 lots to a five-year high of 10,193 lots, the statistics, from the Commodity Futures Trading Commission (CFTC), said.

While speculators decreased their net short exposure to Chicago wheat, by 4,500 contracts, at 38,678 lots their position remained at historically bearish.

'Still liquidating'

"Speculators are still liquidating," Paul Deane at Australia & New Zealand Bank said, with the latest sales, in the week to last Tuesday, coming in the run up to Friday's US Department of Agriculture latest monthly Wasde report, one of the most closely-watched events of the farm commodities calendar.

The Wasde raised its estimate for both US and world inventories of corn, soybeans and wheat, sending futures prices lower.

Wheat futures dropped to a 20-month low on Friday in Chicago, where soybeans hit a 14-month bottom and corn neared a 2011 low. Prices of all three crops remained under pressure on Monday.

Funds more broadly are "continuing to roll out of length" in corn, Jon Michalscheck at broker Benson Quinn Commodities said.

"Depending on what the upcoming Monday and Tuesday trade has in store for us we should see an additional 10,000 contracts or so come out" of net length in the next CFTC report, this Friday.

Wheat vs corn

The shift out of corn may be being spurred too by ideas of corn returning to a more normal discount against wheat, following its unusual premium for much of this year.

"Speculators might be anticipating an increase in the wheat-corn spread, currently at relative lows," Mr Lee said.

There has been increasing talk of substitution of corn for wheat, worldwide, in livestock rations, with rain-damaged harvested in the likes of Australia and Ukraine offering rich supplies of feed wheat.

Chicago wheat for March stood at $5.92 ¾ a bushel early on Monday, a premium to March corn, but one of only 1 cent a bushel.

Better for softs

Speculators were positive on prices of many soft commodities, increasing net long exposure to sugar by nearly 6,000 lots to 52,052, ending a succession of sell-downs from an autumn high of some 140,000 contracts.

In cotton too a revival continued from a two-year low in net length reached in late November, with coffee too extending a rebound in net long exposure.

But ideas of better West African cocoa supplies deepened speculators' net short exposure to the bean, by 2,057 contracts to 7,986 contracts.