I am Stephen Davis, senior market strategist at Walsh Trading, Inc., Chicago, Illinois. You can reach me at 312-878-2391.
It's early February and, in my opinion, time to be bullish on corn. Global corn supplies are plentiful. According to the United States Department of Agriculture (USDA) World Agriculture Supply and Demand Estimates report dated January 12, foreign corn ending stocks for 2025/26 are higher, mostly reflecting an increase for China. Global corn stocks, at 290.9 million tons, are raised 11.8 million.
Meanwhile, in Brazil, soil moisture may be less than ideal going into the safrinha or second-season corn crop that follows this month's soybean harvest. As always, the weather is hard to predict.
DEMAND remains high all over the world. A USDA Foreign Agricultural Service summary that covers the time period January 16-22, states that the destinations were primarily to Mexico (465,100 MT), Japan (265,100 MT), Spain (210,800 MT), Colombia (207,700 MT), and Portugal (95,800 MT).
The USDA estimates of corn use for ethanol production for 2025-2026 are unchanged and remain at 5.6 billion bushels. Towards the end of 2025, the U.S. Department of Energy, Energy Information Administration (EIA) reported that weekly and daily ethanol production had set several record highs. For the week ending December 12th, 2025, average daily ethanol production exceeded 1.131 million barrels per day, surpassing the prior record of 1.126 million barrels set only a few weeks earlier in November of 2025.
In my opinion, demand for corn could increase significantly.
A trade strategy is to buy March 2026 corn futures at 426.0 for each contract. Risk the trade 416.0 stop ($500 risk on each contract). Profit objective is 446.0 good til cancelled (GTC). That is a 20-cent profit per contract.
The daily chart below shows the 200-day moving average as a black line. Notice that the 200-day moving average is close to our 446.0 profit objective.
An option strategy is to sell two March 2026 corn 425.0 put at 3.5 (today's settlement figure). With that premium in your account, buy one May 2026 corn 450.0 call at 7.0 ($350). The March corn 2026 put options expire on February 20, 2026. That's close to 20 days from now. I like selling options within 20 days or less.
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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