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Corn Spreads Continue to Looking For Carry


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CBOT Jul19-Dec19 Old/New crop calendar spread is continuing its trend lower from the start of the 2019 calendar year, narrowing further to -19.75 cents under and making new contract lows of -21.00 cents under this week. The spread also has an additional 10.00 cents further towards -29.50 cent full carry levels, giving producers additional carry to recover and room for narrowing in the spread. The Jul19-Dec19 spread continues to hold below last months broken support and continues to make fresh contract lows. This gives corn spreads considerable room for further decline / narrowing (towards full carry) on the chart if the market decides the current stockpile of corn is over supplied relative to demand.

While below the 3/25/2019 high ($3.80) in front month May19 corn, it will be hard for spreads to widen (head higher on chart) above the -12.00 cents under price level, which correlated closely with this latest dead cat bounce. While weather and planting forecasts are turning the page for expectations and price discovery for this marketing year, there is still fundamental rational behind the continued

Dan's full "Spread Outlook" is available for download, including an indepth look into the most liquid spreads and market conditions that might present opportunities for spreading! Complete with charts and cost of carry calculations!

http://intranet.zaner.com/uploads/dhussey/SprdOut/Spread_Outlook_4.12.2019.pdf



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About the author


Dan began his career in 2006 as an arbitrage and clearing clerk for Spyglass Options in the Eurodollar futures options pit on the floor of the Chicago Mercantile Exchange. Taking his employing brokers advice, Dan soon left the floor to pursue a career “behind the screens upstairs”, as there was an inherent lack of opportunity for market making in open outcry pits. After graduating from the University of Notre Dame in 2009 (and for the subsequent 10 years), Dan leveraged his IT background in networking and computer programing to begin developing computerized trading algorithms and trading systems for multiple private equity firms and his own account. He eventually found his specialization in trading carry trade dynamics in currency and interest rate futures; while simultaneously building his experience in trading both inter-market and intra-market spreads. His trading experience later expanded to include most commodity spreads, with an emphasis on carry trade economics in agricultural commodities. In 2016 Dan decided to take his career full circle by becoming a series 3 and 34 licensed broker; and expanded his outreach to the agriculture production community. In 2018, he joined Zaner Financial Services Ag Hedge division, bringing his knowledge and expertise of carry trade economics and continues expanding exposure to spread markets. Dan can be reached at (312)277-0110 by phone, @DanielHusseyJr on twitter, and emailed at dhussey@zaner.com.
 
 
Contributing author since 2/15/2019 

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