When Rain Doesn't Make Grain

If you were ever curious what a weather premium looks like in corn futures, look no further than the July 2019 contract. Continued wet conditions seems to have spooked shorts and begun the short covering rally, which the market was inevitably anticipating. While corn prices are seeing a follow through in the calendar spreads as well (bull spreading in a green market), I still believe it is prudent to use any subsequent rally as a good marketing opportunity. Considering where the market has been the last five years, and there are always methods you can use to improve on price, even though funds and speculators are getting out commercials will just be getting in.

I mentioned in my previous release, that while below the March 26th/27th high ($3.90) in Jul19 corn, it will be hard for spreads to widen (head higher on chart) above the -12.00 cents under price level, which correlated closely with the last short covering rally in corn futures. Now that the market is testing both of those levels, we have a true test of the fundamentals of this market. While weather and planting forecasts are turning...


Dan's full "Spread Outlook" is available for download, including an indepth look into the most liquid spreads and market conditions that might present opportunities for spreading!

Complete with charts and Cost of Carry calculations

>¬es=Spread Outlook 52019 Download&page=http://intranet.zaner.com/uploads/dhussey/SprdOut/Spread_Outlook_5.20.2019.pdf" target="_blank">http://intranet.zaner.com/uploads/dhussey/SprdOut/Spread_Outlook_5.20.2019.pdf