After significant rallies during the first part of 2026, both corn and soybean markets have experienced substantial setbacks as favorable weather and improving crop prospects pressured prices lower. For this speculative recommendation, we are looking to establish bullish exposure in both markets through near-the-money July Week 2 call options.
Following the recent washout in prices, managed money has largely liquidated long positions in both corn and soybeans, leaving corn funds net short and soybean funds holding only a modest net short position (see accompanying COT charts below). With much of the speculative length now removed from the market and the highly anticipated June 30 Acreage report, July weather, and the Fourth of July holiday weekend still ahead, making the grain markets vulnerable to a short-covering rally.
Why We Like the July Week 2 Call Options:
- Defined Risk: Maximum risk is limited to the premium paid.
- Major USDA Report Ahead: The June 30 Acreage and Grain Stocks reports could provide a bullish surprise.
- Holiday Weekend Risk: The Fourth of July holiday adds additional uncertainty during a critical weather period.
- July Weather Market: July Week 2 options provide exposure beyond the holiday weekend, and into the heart of the early July weather market. (Expiration on July 10)
- Reduced Fund Length: Managed money has aggressively liquidated long positions in both markets, increasing the potential for short-covering rallies.
Long Corn Recommendation
Entry: Buy at-the-money July Week 2 Corn Call Options.
- ie: 424.00 July week 2 call option trading for about 11 cents.
Target: We are looking for a recovery rally driven by short covering, USDA surprises, or adverse weather. Traders should consider taking profits if option values double or if corn futures approach major technical resistance.
Risk Exit: Maximum risk is limited to the premium paid. Consider exiting if the June 30 USDA reports and early July weather remain non-threatening, reducing the likelihood of an upside move.
Long Soybean Recommendation
Entry: Buy at-the-money July Week 2 Soybean Call Options.
- ie: 1134.00 July week 2 call option trading for about 17 cents.
Target: We are looking for a weather or acreage-driven rally. Traders should consider taking profits if option values double or if soybean futures challenge nearby resistance levels.
Risk Exit: Maximum risk is limited to the premium paid. Consider exiting if the June 30 report and early July weather fail to provide bullish catalysts.
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