Grain Spreads: Dec 26/Dec27 Corn

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Commentary

Managed money is at again the grain complex as threats to maritime transit is the theme of the week. escalations being seen in the Strait of Hormuz, Black Sea, and now Red Sea, the most front-of-mind conflict is the Russia Ukraine war. Russia is attacking other infrastructure such as Ukraine’s port of Odesa. Russia is also the Novorossiysk port due to Ukraine’s attacks on the facilities there. One item also missing from today’s headlines was assurances that grain trade would be minimally disrupted. That is a departure from what Ukraine or Russia had previously stated. 

Weather in the US and the EU also helped drive the market higher today in my opinion and December corn has extended to its highest price since May 26th. Limited precipitation for the next 2 weeks across the Midwest and Plains, outside of part of eastern Nebraska and SW Iowa, has prompted analysts to begin reducing yield potential, which would result in tighter ending stocks. After some relief from the heat this week, warmer than average temperatures will return again next week in the EU and precipitation will be light and scattered over the next 10 days, offering little chance for the crop to improve significantly. Today's upside breakout in wheat also spilled over to corn and now that December has convincingly moved above and closed right at 484.4 resistance. The level represents 10% higher in corn for 2026.  The rally can extend at least another 22 cents or another 5% higher to 5.06, which represents 15% higher on year. Keep in mind forecasts can change in a NY minute. Dec26/Dec 27 corn can trade to an inversion to 10 cents Dec 26 over or return to the lows on abrupt changes in the forecast. I have option ideas as well for those who need price protection.

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Sean Lusk

Vice President Commercial Hedging Division

Walsh Trading

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