Financial Services
Gradable Financial Services March Newsletter
With corn prices rallying amid recent geopolitical tensions, Gradable Financial Services highlights the CZ'26 Fence with Daily Double strategy to help manage downside risk.
With corn prices rallying amid recent geopolitical tensions, Gradable Financial Services highlights the CZ'26 Fence with Daily Double strategy to help manage downside risk.
CZ’26 Fence w/ Daily Double: 35¢ of upside participation and 50¢ of downside protection
Participate in a rally to over $5…AND…Protect pricing down to insurance levels
Corn prices have trended upward since January, gaining further momentum this week as energy markets rally due to military actions in Iran. CZ26 is 10¢ above its pre-report level and at its highest level since June 2025. Our view is that strong ethanol demand and a heightened risk premium should keep corn supported in the near-term, but the risk is now to the downside if geopolitical tensions calm or planting weather is ideal. Given the downside risk to this rally, we think it’s time to “build a Fence.” Our Fence structure provides protection from 4.75 down to 92% of the Spring insurance level and has the advantage of pricing bushels daily unlike a traditional put spread. A daily double-up fits perfectly here, increasing sales if prices rally another ~10% above current levels, while expiring mostly untouched if this rally fails as we fear.
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