Corn Spread Reversal: Traders Told to Sell Now
Walsh Trading's Rich Moran is suggesting that traders consider selling the JUL-SEP Corn Spread (ZCN27-ZCU27) at +27½ or better. This spread has been trending upwards, reaching a 52-week high of +33½ on September 2nd, but it settled below its 14-day moving average last Friday and again today.
Since mid-August, the spread has increased from +10 to +33½, and Moran believes that getting short this spread could offer a good risk/reward trade. The Full Carry for Corn from July 2027 to September 2027 is 22.04, which puts the JUL-SEP Corn Spread at -22 (negative 22). However, it settled today at +27¾, 59¾ cents higher.
Moran recommends selling ZCN27-ZCU27 with a risk of $6½ per spread and potentially making $13 per spread, plus fees and commissions. This is not suitable for all investors, as futures and options trading involve substantial risk.