Watch for corn to rise above 200-day moving average later this year

I am Stephen Davis, senior market strategist at Walsh Trading, Inc., Chicago, Illinois. You can reach me at 312-878-2391.

Due to very favorable growing conditions, December 2026 Corn has traded below the 200-day moving average since early June. To explain this trend, first we observe that Managed Money funds have extended short positions to slightly more than 46,000 contracts in the past week. If the weather in the United States becomes less favorable for corn, these new fund shorts could potentially fuel the next rally.

Moving on, an active storm system in the Midwest continues this week. Next week, the forecast calls for less rain and more heat, especially in the Eastern corn belt.  

Globally, Some Western European Union countries, including France, Hungary, Romania, Ukraine and Czechoslovakia,  are experiencing crop stress as a hot and dry weather pattern continues. Ukrainian business news sources report that Russia's attacks on Ukraine's ports puts could jeopardize that country's 11 percent share of the global corn exports. This week, U.S. Trade Representative Jamieson Greer is headed to India to to discuss the United States–India Joint Statement and the Interim Agreement as part of the broader U.S.-India Bilateral Trade Agreement negotiations. If successful, the agreement could support increased U.S. corn, soybean and soymeal exports to India.

The corn market has stabilized over the past week, suggesting that the favorable weather conditions are already factored into the market prices. Without a bullish shift in the weather, rallies may remain modest until we get closer to the June 30 Acreage Report released by the United States Department of Agriculture (USDA) Economics, Statistics and Market Information System.  Strong demand for U.S. corn could spark a rally later this summer. 
An option trade strategy is to buy December 2026 corn 460 calls at 15.0 ($750 per contract). 

To discuss trading strategies, contact me anytime. Have an excellent day. 

Stephen Davis
Senior Market Strategist 
Walsh Trading

Direct 312 878 2391 
Toll Free 800 556 9411
sdavis@walshtrading.com  
www.walshtrading.com

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