Nasdaq
华尔街日报Grain Spreads: Pressure Campaign
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Commentary
Futures ended 2025 on a bit of a sour note, as risk-off sentiments range across the marketplace. Grain futures started out the first session of 2026 with losses across the board. A void of fresh news in low volume trade was in my view the primary cause of this start. There was little change in South American weather over New Year’s. Brazil is seeing mostly favorable weather conditions and Argentina is seeing stress but has rain in the forecast. Ongoing heavy deliveries against the January contract put more pressure on the soy complex, as did a weaker energy market. Grains were supported by expanding drought conditions in the US Wheat Belt a flash sale of 132,000 metric tons of corn to South Korea. corn prices have been in a 20-cent trading range since November, with traders minimizing exposure as uncertainties linger around South America’s safrinha crop as they continue to gauge U.S. production and demand. USDA’s final Production Report and monthly supply and demand update on Jan. 12 will almost surely drive a move outside of the recent range, with a particular focus on safrinha corn plantings and U.S. production prospects for 2026-27 thereafter. I think those uncertainties of potential weather threats in South America along with a potential adjustment of lower corn yield on the January 12th crop report will win the day. Corn is too cheap in my view down here as demand is still robust. That said this market may probe key support at 4.32/4.34 basis March futures before any rally ensues. Option idea below.
Trade Ideas
Options- Buy the April corn 450 call and sell the April corn 465/450 put spread. Bid the spread at even money.
Risk/Reward
Options. This is a three-legged option spread that is based off the May 2026 Corn futures. May corn is at 445. The margin per 1 spread is $685.00, The maximum risk is $750 plus commissions and fees. Demand, weather potential, and a downwardly revised production number form USDA is why one would want to be long corn into February.
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Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
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