Consider buying a call option on July corn (ZCN26) futures.
See on the daily bar chart for July corn futures that that prices are trending up and late last week hit a 10-month high. See, too at the bottom of the chart that the moving average convergence divergence (MACD) indicator is in a bullish posture as the blue MACD line is above the red trigger line and both lines are trending up. Bulls have the firm near-term technical advantage.
Fundamentally, the overall supply and demand balance sheet for U.S. corn remains bullish. U.S. corn exports have been solid recently, while domestic demand for corn has also been good. And more years than not, some degree of a weather-market scare quickly pops up in the corn and soybean markets in the spring and summer. The past two years saw no significant summertime weather market scares in corn and beans, which is very rare. It’s very unlikely those markets can go three straight years without even a minor weather market scare in the summertime.
Consider buying a call option on July corn futures, with an upside price objective of $5.25, or above. The option expires the third Friday in June.
IMPORTANT NOTE: I am not a futures broker and do not manage any trading accounts other than my own personal account. It is my goal to point out to you potential trading opportunities. However, it is up to you to: (1) decide when and if you want to initiate any trades and (2) determine the size of any trades you may initiate. Any trades I discuss are hypothetical in nature.
Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading (and I agree 100%):
Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND RISKY BUSINESS. Before you invest any money in futures or options contracts, you should consider your financial experience, goals and financial resources, and know how much you can afford to lose above and beyond your initial payment to a broker. You should understand commodity futures and options contracts and your obligations in entering into those contracts. You should understand your exposure to risk and other aspects of trading by thoroughly reviewing the risk disclosure documents your broker is required to give you.
On the date of publication, Jim Wyckoff did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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