Medium term
Trade view / 02 June 2016 at 2:57 GMT

Traders get ready for 'king corn'

Managing Partner / Spotlight Group
United Kingdom
Instrument: ZCN6
Price target:
Market price:

The wet season in Brazil is between February and May, with considerable year-to-year and decade-to-decade variability. In the west of the country there are reports of insufficient corn feed to feed poultry. Rationing has already been introduced. Much hope is being directed towards the “Safrihna” corn harvest in mid-June.

Sadly, the lack of rainfall during the grain-fill period has reduced projections for Safrihna. Recently the winter corn production forecast fell to 48.9 tonnes, down 10% from last month's figures and 10.5% lower than 2015 production.

There is little relief to be found in the US, as following the long weekend row crops have rallied as concerns grew that the dry weather in the Midwest, which is allowing producers to get their sowings finished up, could eventually become a problem.

The possibility of a drought in the US is accentuated by danger that the 2015-16 El Nino swings into a La Nina. This is a market that looks set to build in weather premium as a drought is heading toward the heart of the US growing region.
 Source: Spotlight Ideas     

Corn 10-year chart
 Source: Spotlight Ideas

Management and risk

Parameters: Corn July 16 ZCN6 US Cents/Bushel

Entry: Buy at 413.50

423.08, 431.38,442.56


Time horizon:
— Edited by Adam Courtenay

For more on commodities click here         

Non-independent investment research disclaimer applies. Read more
Futuretick Futuretick
Hi Stephen, thank you for your fundamental analysis in Corn and Cocoa. I would love to hear the same analysis for Wheat (which just started trading above 470 after a quick shake out!). But it looks like all grains and are on fire this summer (remind of 2010 summer)
Stephen Pope Stephen Pope
I am in meetings all day...but tonight I will prepare notes on wheat for you. Steve
DBVancouver DBVancouver
Hi Stephen, good call on cocoa last night. Thank you for the profitable idea.
benlouro benlouro
where can I find the best information about the weather on plantations?
Stephen Pope Stephen Pope
For benlouro,

Please look at the following sites:

These provide a good view on precipitation in West Africa and the plantation regions.

Stephen Pope Stephen Pope
Dear Futuretick,

I have submitted a Trade Note on wheat...hopefully it will appear tomorrow. Steve
Futuretick Futuretick
Thanks Stephen. Wheat “pop up” today just like corn, but the one on fire is Soybean and Meal leading the way since several weeks!
Will watch grains closely
benlouro benlouro
thanks Stephen


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