Walsh Corn Opportunities - Pure Hedge
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Corn has lost some momentum since making its high near 550 in the December contract in early September but the story is still the same. Last Friday’s crop report was mostly in line with expectations for corn, although the yield cut was not quite as bullish as the average pre-report estimate. The USDA estimated the corn yield at 178.5 bushels per acre, down 2.2 bpa from last month. New crop corn ending stocks tightened by 86 million bushels from last month to 1.567 bb. Stocks-to-use is now 9.7% from 10.1% previously, which is the tightest since 2021/22. World ending stocks were also cut by 2.6 mmt from last month’s report to 272.1 mmt. The estimate for world ending stocks is down significantly from the 2025/26 figure of 301.4 mmt. Today’s Commitments of Traders report showed managed money still hold a massive long position in corn. Next Thursday, the U.S.-China summit has the potential to further tighten the balance sheet, if China decides to add on to their $17 billion U.S. Ag purchase commitment. The Quarterly Grain Stocks report will be released at the end of the month.
Consider the following opportunities:
Buy the December-March Corn Spread (ZCZ26-ZCH27)
PRICE: -14 ¼ cents
The trade above allows you to have a bullish position in corn with less risk than being long the outright futures. This spread traded as high as +2 in 2021/22. The margin is $275 per spread. Another idea is buying the 600 March ‘27 calls at a discount, if corn starts to face some more significant pressure as harvest kicks off.
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Hans Schmit
Broker, Pure Hedge Division
Direct: 312-765-7311
WALSH TRADING INC.
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
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