Corn short-covering and reversing up

I am Stephen Davis, senior market strategist at Walsh Trading, Inc., Chicago, Illinois. You can reach me at 312-878-2391.

The current 2026/27 U.S. corn outlook is for smaller production, domestic use, exports, and ending stocks, according to today's World Agricultural Supply and Demand Estimates report put out by the United States Department of Agriculture (USDA). Corn production is forecast at 15.9 billion bushels, down 141 million from last month. With a smaller crop, feed and residual use is lowered 25 million bushels to 6.0 billion. Exports are also lowered this month, down 25 million bushels to 3.3 billion reflecting shipments and sales to date. Corn ending stocks are reduced to 1.8 billion bushels.

Extreme oversold conditions could trigger further short covering. Below is a daily March 2027 chart for corn showing the 200-day moving average. In my opinion, will reach the 200-day moving average by the end of the year. That would be 30-cent rally. 

The second chart is a weekly March 2027 corn chart pattern. In my opinion, this is bullish because corn is reversing up and could close at the extreme high by the end of this week.

A trade strategy is to buy March 2027 corn at 457.0, good til cancelled (GTC). Sell March 2027 corn 447.0 stop. Profit objective is to sell March 2027 corn at 501.0, GTC.

Option trade strategies:

 (1) Buy March 2027 corn 4.80 call at 10.4 ($525 per option). 

 (2) Buy March 2027 corn 5.00 call at 6.0 ($300 per option).  

Expiration on both of these options is February 19, 2027. 

In my opinion, these options will be in the money by the end of the year. 

 

To discuss trading strategies, contact me anytime. Have an excellent day. 

Stephen Davis
Senior Market Strategist 
Walsh Trading

Direct 312 878 2391 
Toll Free 800 556 9411
sdavis@walshtrading.com  
www.walshtrading.com

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