Grain Spreads: Impressive Demand Remains in Corn

Please join me for a free grain webinar every Thursday at 3pm Central. We discuss supply, demand, weather, and the charts.  Sign Up Now

If you would like to receive more information on the commodity markets, please use the link to join our email list Sign Up Now

Commentary

Energy values saw the most pressure in the outside markets with crude down nearly $5.00 a barrel overnight. This came on news the US and Iran may be close to a peace deal, although the US did attack Iran over the weekend in what was termed a “self-defense” strike. Several questions are surrounding this as the White House continues to claim Iran has no military left. Reports from Iran are also much less optimistic than those from the US on how close the sides are to ending the conflict. Even if now military actions are taking place the Straits of Hormuz are not open and that is what trade is focused on. US weather is mostly favorable for the end of corn and soybean planting and crop development. USDA inspected 62.3 million bushels of corn for export shipment in the week ending May 21, Marketing year to date corn export inspections for shipment to all destinations total a record pace of 2.369 billion bushels, up 519 million bushels or 28% from the previous year's pace. The total exceeds the seasonal pace needed to hit USDA's target by 206 million bushels. That number is projected to decrease, we will see. Mexico has become an active buyer of both old- and new-crop corn, while we've seen more sales to unknown destinations as well for both old- and new-crop corn. Some buyers appear to be front loading purchases for next year on the fear that a global fertilizer shortage in 2027 could curtail corn production next year. The possibility exists that we could see another increase in the export target for corn for the 25/26 marketing year, which would draw down the carry in for the next marketing year in the amount of 50 to 75 million bushels. New crop Dec 26 corn should see another run higher following this week's end month fund unwind in my opinion.

Futures-On a dip, buy the Dec 26/Dec 27 corn spread at a 14-cent carry.

Options-N/A

Risk

Futures-If filled at a 14-cent carry, place a stop loss at 19 cents under, risking 5 cents plus commissions and fees. 

Sean Lusk

Vice President Commercial Hedging Division

Walsh Trading

312 957 8103

888 391 7894 toll free

312 256 0109 fax

slusk@walshtrading.com

www.walshtrading.com

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.