Consider Corn Call Spread on Planting Delays
By Phil Streible
Wet weather has delayed corn planting this season, and the effects are likely to be felt as the growing season progresses if farmers can’t get enough in the ground in time. Consider the December corn $5/$6 call spread as a long-term bullish play. We are at a critical juncture in terms of planting and I see potential for prices to increase in corn. If corn doesn’t get in the ground by this weekend, the effects of the delay will expose the crop to excess heat later in the summer at a time it hasn’t developed enough to resist it. Into harvest, farmers may be facing frost. The later the corn gets in the ground, the more vulnerable the crop is to problems. We could see farmers switch to soybeans, which can be planted later.
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Phillip Streible is a Senior Market Strategist with Lind Plus. He can be reached at 800-803-8037 or via email at firstname.lastname@example.org.
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