Prosper from volatility in the corn market - be long corn for next six months

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

The corn futures market reached a three-month high as the first day of the Pro Farmer Crop Tour reported middling yields in South Dakota and Ohio. Prior to the tour, U.S. corn crop ending stocks were trending lower. Disappointing Crop Tour numbers could foretell even lower numbers for yields and total crop production in the next World Agricultural Supply and Demand Estimates (WASDE) report from the United States Department of Agriculture due September 11. 

Fundamentals on corn are bullish and the technicals favor higher prices. 

Note the December 2026 corn chart below. We see four days of higher highs and higher lows. Demand for U.S. corn is expected to be strong into early 2027 due to record-breaking heat negatively affecting crops in European countries. This may lead to large purchases of U.S. corn from these countries. In my opinion, we will see higher corn prices going into the end of the year.

A trade strategy is to buy December 2026 corn at 482.0. Risk the trade to 470.0 stop, good till cancelled (GTC). That's a $600 risk per contract. Profit objective is 501.0, GTC. Profit potiential is $1,950 per contract. That is a very good risk/reward ratio. 

An option trade strategy is buy March 2027 corn at 510/610 call spreads. The cost is 20.0 ($1,000 per spread). Maximum profit potential on each spread is $5,000. These options expire February 19, 2027. This conservative option strategy gives you the opportunity to long in the corn market for six months. This is plenty of time for corn to trend higher, in my opinion.  

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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