Commentary
It’s my belief moving forward when looking at Corn that the trade is watching weather and the prospects for domestic demand. This is until the USDA release regarding acreage in 2 weeks. The government wrapped up its data collection for the June Acreage Survey about a week ago. All intentions by the producer are locked in for the survey and its release will show if price bought acres and if delays bought PP acres. The IHS Market private survey released today showed in their opinion the idea the USDA was too small in its March corn acreage and will have to come up to 91 million acres in the June update. The USDA’s number in March was 89.5 million acres. No yield data at the end of the month, only acreage and stocks numbers.
While that is all well and good, it’s not what you plant, but what you grow. I think given late plantings that weather in late July, will determine this year’s corn crop in my view. Until then the unknowns could carry the day in my view. One spread I’m looking at is July 23/dec 23 corn spread. This years planted crop versus next year. The spread has lost 43 cents since the early May highs. It just hit a fifty percent retracement last week for the yearly high/low. Trade idea and chart below.
Trade Idea:
Futures-Buy the July/Dec Corn Spread at 72 cents July 22 over.
Options-N/A
Risk/Reward-
Futures-Place a stop loss at 57 cents risking approximately 15 cents or $750 plus trade costs and fees. Im looking at a potential target at 90 cents, gap on the chart.
Options-N/A
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