Weather is expected to be hotter next week, with a heat dome forming over the center of the country. The southern plains, lower Mississippi Valley, and the South are expected to see the most heat. The intense heat may remain into the final week of July, stressing the southwestern corn belt. Average minimum temperatures across the eastern corn belt have been historically high. Warm nights can potentially stress corn, as pollination is still ongoing.

The near-term forecast also shows thunderstorms developing over the northern plains, upper Midwest, and eastern corn belt, with the potential for flash flooding. Weather will be key on Sunday night to see if the weather patterns develop as anticipated. Extended forecasts show the potential for severe weather, including derechos, for the end of July and early August. It is possible that yields could come in lower than the 185-190 bushels per acre some are predicting.

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The U.S. recently made a favorable deal with Indonesia, including $4.5 billion in agricultural exports. Commenting on U.S. and China trade discussions, China’s Commerce Minister Wang Wentao said on Friday that both sides remain important economic and trade partners. China has a deadline of August 12 before increased import tariffs are imposed. A trade deal with China could be reached sometime near that deadline or around August 1. The U.S. is also reportedly very close to a trade deal with India. 

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Short covering has taken place over the last few daytime sessions and has room to continue. Corn closed on Friday at $4.27 3/4, up 6 3/4 cents in the December contract. Corn could move much higher, especially with a close over $4.34 in the December contract.

Please consider the following strategies:

For the first call spread, the maximum loss is the cost of the trade at 11 3/8 cents. The potential gain is 30 cents or $1,500/Trade Package.

The second spread has a max loss of the cost of the trade at 9 5/8. The maximum gain is 40 cents or $2,000/Trade Package.

The third trade has unlimited maximum loss and a potential gain of 30 cents or $1,500/Trade Package + the decline in the put.

ALL PRICES ARE FRIDAY'S SETTLEMENT 

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Hans Schmit, Walsh Trading

Direct 312-765-7311 Toll Free 800-993-5449

hschmit@walshtrading.com    www.walshtrading.com

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