Instead of waiting for a potential price rally, corn growers should capitalize on steep contango and high implied volatility by initiating early marketing on deferred N27 and Z27 contracts.
CZ’27 Enhancer Reserve: Price bushels at $5 and grind your double away daily
The Flow Report With prices significantly lower, we anticipate many growers will grow complacent in marketing… and miss a major opportunity on the deferred end of the curve: C N27 & Z27. Corn prices have gone into steep contango causing longer-dated contracts to relatively outperform. Additionally, since our last newsletter, implied volatility has rallied as predicted. So while we may see higher prices at some point in the 27/28 marketing year, we feel growers can earn far more in time value with an early start and high implied vol levels than they are likely to make waiting for a price rally, particularly after the 10+ c/bu bounce we’ve enjoyed post-report. $5 prices are still available in both N27 and Z27, even with a daily double - the trade we particularly like as you’ll likely “regain” volumes to sell later in the marketing year.
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