Grain Spreads: Demand Drives Corn

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Commentary

Corn in my opinion was the only market in the grain complex that had a hint of bullishness in today’s WASDE report.  Ending stocks were cut more than expected. Surprisingly, after a significant increase in the export category last month, USDA opted for another strong increase of 125 million bushels this month, the only change to the balance sheet, pulling ending stocks well below expectations by 125 million bushels. World ending stocks also came in below estimates, and the report can be considered slightly bullish in my opinion. On the most recent Export Sales Report publication for the week ending November 6, 2025 (due to the government shutdown), U.S. corn exports were 197.2 million bushels ahead of the seasonal pace needed to meet the at-the-time USDA export estimate of 3,075 million bushels, so the USDA update today was justified. Corn may continue to capture a bid into the January report possibly. The fear is now in subsequent gov’t reports that yield and then production come in lower from 186 BPA to the 182/84 range. That’s where most crop scouts were due to late season drought in the Eastern belt. Today’s report focused on the demand side of the ledger, while January’s numbers will be examined for any supply side surprises. Trade idea below. 

Trade Ideas

Futures-N/A

Options-Buy the Feb 26 corn 450 call while at the same time one sells the Feb 26 corn 460/450 put spread. Buy the 3-way option spread for even money or better plus commissions and fees. ZCG26C450:P450:460[3P]

Risk/Reward

Futures-N/A

Options-The maximum risk on this 3-way option strategy is $500.00 plus commissions and fees. I feel this market will be supported by any pullbacks with farmer selling muted for now. Beans going bid or a weather market in South America could also support. Risk no more than 6 cents or $300 plus trade costs and fees. Place an objective at 30 cents to exit. 

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Sean Lusk

Vice President Commercial Hedging Division

Walsh Trading

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