Commentary
Corn rallied a whopping 1.4 cents today but is still down three quarters of a penny for the week. Tight ranges from the last two sessions as a lack of conviction in either direction is featured so far. Wheat broke over 25 cents to start the week amid heavy selling yesterday while today’s minor loss was rather subdued. Beans traded over 10.10 a few times to begin the week only to see a lack of conviction closing just at unchanged for the week at 10.06. For corn managed funds now only short about 135K. That’s down almost 220K from the record short made earlier this year at 353K managed shorts. Yet the price is only 4.12 on the December Board. I think producers are getting a gift here. This warm/hot dry weather late keeps corn yielding better and producing more with these hybrid seeds. Last year was a prime example. Corn grew at a 4 bushel per acre clip from late Summer to final. Our latest WASDE last week rose slightly from 183.2 to 183.6 BPA. Its minor but growing not declining despite a dry August in most parts of the Midwest. Deferred pricing is at 4.30 March, 4.40 May and almost 4.50 July. If one has unpriced bushels into and through harvest, consider the following. Brazilian government crop supply agency Conab initially estimated 2024/25 soybean production at 166.3 MMT, up almost 13% from last season, with corn at 119.8 MMT, up almost 4% year-over year. Total grain and oilseed production for the new crop cycle was pegged at a record 326.9 MMT. While Argentina looks to plant less corn and more beans, Brazil with decent weather can pick up most of any potential corn loss should it occur in Argentina. Hedge idea for unpriced bushels below in corn.
Trade Ideas
Futures-N/A
Options-Buy the 430 puts in March 25 corn and sell the September 5.00 calls. Cost to entry even money minus trade costs and fees.
Risk/Reward
Futures-N/A
Options-There is unlimited risk here. This hedge idea is suggested for corn producers only as the short calls/long puts may act as protection versus their future production.
Please join me every Thursday at 3pm Central for a free grain webinar. We discuss supply, demand, weather, and the charts. Sign Up Now
Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
312 957 8103
888 391 7894 toll free
312 256 0109 fax
Walsh Trading
311 S Wacker Drive Suite 540
Chicago, Il 60606
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices.PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.