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It was reported Wednesday afternoon that a large call option spread, equating to 500 million bushels, was created in November corn.
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This position is a bet on a US weather market through the rest of summer and into fall.
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However, a variety of market factors; technical, fundamental, and seasonal, indicate this position could be in for a rough ride.
A look at the quote screen Thursday morning and we find the Corn market in the green, most likely on the latest 6-to-10-day forecast, for July 28 to August 1, that continued to call for above normal temperatures and below normal precipitation across the US Midwest. The September issue (ZCU26) rallied as much as 3.75 cents on trade volume of 21,000 contracts and was sitting 3.25 cents higher at this writing. Meanwhile, the December issue (ZCZ26) added as much as 3.75 cents overnight on trade volume of 50,000 contracts and was sitting 3.75 cents higher at this writing. The September-December futures spread has dropped back to its low daily close of 23.5 cents carry and covering a bearish 76% calculated full commercial carry. Further out, the December-March spread was sitting on a carry of 15.5 cents and covering a neutral 51%. Even further out in the 2026-27 marketing year we see the May-July spread at a carry of only 3.0 cents and covering a bullish 3%, as compared to the 2026 edition of the spread closing this same week last year covering a still bullish 30%. What do all these corn futures spreads tell us?
