It doesn’t look like it. Last week’s USDA report suggested bearish ending stocks with the USDA number at 851 million bushels which was up 50 million from trade expectations. The immediate reaction is apparent in the chart with the 595 support from December easily broken. A bearish play for the short-term can be achieved by buying the June corn 575 put and selling the July corn 555 put for $50 plus fees. To the upside consider buying the June 590 calls and selling the July 620 calls for roughly $50 plus fees with a gamma advantage of roughly 1x2 to the June. There appears to be a 1x2 gamma advantage to the June. There are 12 days until expiration on the June so the risk is if corn stays in the area. Depending on which side (if any) works consider buying back the opposite side’s short option and letting it trade.
*fundamental information comprised from RJO research/The Hightower Report
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Michael Rataj
Commodities Broker
Michael Rataj discovered an interest in financial markets during a career in the mortgage industry. He made the transition to the futures markets after realizing the impact the markets have in every facet of business. Michael joined RJO Futures and uses his skills as a trading consultant to manage risk for his clients. Michael focuses on options trading for their staying power and limited-risk type trades, but trades futures depending on the client's appetite for risk and portfolio size. He beli.... Read More
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