Tidbits, Corn Spread 6/8/25
- Wright team
- Jun 8
- 5 min read
Tidbits
A bear spread is when a trader sells the nearby futures contract and buys the deferred futures contract.
A bull spread is when a trader buys the nearby futures contract and sells the deferred futures contract.
When there is plenty of old crop and no chance of a shortage of old crop, the old crop futures price will be below the new crop price. Why? The new crop is not made yet and it is at a higher price because of the weather risk. The old crop corn is in the bin.
When demand for old crop is so strong there is a possibility of not having enough to meet the demand until harvest begins, the old crop price will increase to reduce demand to make sure the market does not run out of the crop, while the new crop price will be determined by weather and acres, which is usually normal and that means a normal crop and lower new crop prices as the crop progresses to being made.
In January and most of February this year, the market was fearful of running out of corn this summer. July futures contract was gaining on new crop December corn contract.
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