Corn futures may appear to be lacking conviction lately as both nearby and deferred contracts shuffle mainly sideways in low-key trade ahead of the upcoming U.S. Department of Agriculture production and stocks report due on Jan. 12.
But judging by the steady climb in open interest in both put and call options in recent weeks, traders expect prices to snap their recent bout of sideways trade before long. The problem is, options activity suggests traders are equally split along bullish and bearish lines, so it remains a guessing game as to which way this market will ultimately break.
This week’s USDA releases on U.S. and world crop production and stocks are expected to reset the tone of grains and oilseeds trade for the coming weeks and provide sharper focus on which crops are likely justified in pushing higher in terms of price, and which may be destined for lower values.
Of key interest will be any revisions to the U.S. corn balance sheet following a challenging growing season last summer in which the crop substantially undershot early-year projections to raise continuing questions over the adequateness of end-year inventories.