Chicago Wheat Trade Idea
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Funds are short wheat. With the continued attacks by both sides on the Black Sea causing mayhem in the grain markets as ships are sunk and ports suffer damage the situation seems to be getting worse with no end in sight. Insurance companies are backing away from the area and with major HRW states behind in planting the issues keep climbing. Funds are fickle and with all the negatives their resolve is being tested. We could see a stronger Wheat market heading into 2027.
Trade Idea:
Buy the July 27 Chicago wheat 8.00/9.00 call spread, while selling the July 27 Chicago wheat 9.00/8.00 put spread. Bid the spread at a negative -70 cent collection.
Margin -$832 per spread
Risk-Maximum risk at expiration next June is 30 cents plus commissions and fees.
If filled at a 70-cent collection, we will risk 20 cents on a GTC stop loss, rising approximately 1K plus trade costs and fees.
We feel that July 27 wheat will eventually take out its contract high at 8.05 and trade to the 850 area. Should that occur in the weeks to come, look to exit the spread at positive 20 cents, for a gain of 90 cents less trade costs and fees.
**Call me for a free consultation for a marketing plan regarding your livestock needs.**
Ben DiCostanzo
Senior Livestock Analyst
Walsh Trading, Inc.
Direct: 312.957.4163
888.391.7894
Fax: 312.256.0109
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