The Prospective Plantings report and Quarterly Grain Stocks report are both on Tuesday, March 31st. If you don’t have enough downside protection on, here are the options strategies that we like. The last trade is a call strategy to participate in upside. Our view is that we want to be rewarding this market as hedgers. We think there will be a lot more back and forth opportunities in this market than we’ve seen in the past two years. The market is extremely headline driven right now and not particularly trading fundamentals. We see a good fundamental case for higher prices, but given the USDA balance sheet we still need to be aware of the downside risks.

All that to be said, this is why we like hedging with options. We like getting options around cash sales or doing options in replacement of cash sales.

Old Crop Downside Protection:
No cost options strategy - marginable
Buy JULY 470 PUT
Sell JULY 430 PUT
Sell JULY 500 CALL
Gives you 40 cents of downside protection on old crop corn and 30 cents of upside participation for no cost besides margin.
Expires 6/26/26

If you want shorter expiry - June options based off the July contract but expire 5/22/26
Same strikes cost appx 2.5 cents

If you want a strategy with no margin requirement we would look at buying May puts (less time value/cost) for about 10 cents.

New Crop Downside Protection

No margin requirement - Buy December SHORT DATED June 4.80 PUT (based off the Dec contract but expires in May - giving you 57 days of protection)
Buy the 4.80 put for 10 cents or less

Marginable positions - Buy December SHORT DATED July 4.80 puts - sell 5.50 calls
Net option cost about 8 cents
Gives you 100% downside protection and 60 cents of upside participation for 8 cents
Expires 6/26/26

Upside Strategies

Buy December SHORT DATED May $5.00 call for 10 cents or less
Gives you 100% upside participation vs the December contract - expires 4/24
Funds have been buying the back months in grains as an inflation trade - so we don’t mind pushing our length to the December

Or Buy week 2 corn calls - trade vs the May contract but expire 4/10
These are the shortest time value options available to get through the report
Buy 4.75 calls for 7.5 cents appx.

We want to be looking for any meaningful pullback as an opportunity to buy calls. Right now with volatility high we do not like buying time value.

Give us a call and let’s customize the right strategy to fit your needs, objectives and risk tolerances.

end of quarter report Corn trades

Corn at two year highs - here’s how we’re looking at it