The best cure for a high corn price is a high corn price because producers will plant more corn next season to take advantage of the current high price and inadvertently drive up the supply which will in turn drive down the future price. Assuming supply through March is scarce and by December it will be relatively plentiful, it makes sense to go long the March contract and short December because the March contract should outperform the December. Both can go up and down together, March just needs to outperform. Yesterday was a red day for both contracts and today is a green day for both, gains in the March/December spread were realized on both days. The December leg can be closed for greater reward if March corn resumes the strong upward rally but the risk will be greater because there will no longer be a balanced quantity of contracts mostly cancelling each other out. I currently have one contract of each and am playing it by ear because spread trading is new to me. I may up the quantity to two or three each depending on how the trade goes and if my broker will let me.
Comment:
Not liking the way this is looking, still in it.
Trade closed manually:
too much down and to the side movement for my liking, took a loss and moving on to greener crops