The prolonged bear market in corn could soon end. the grain’s price has been mired in a multiyear slump, trading as low as $3.16 a bushel in August, down from more than $8 in the middle of 2012.
The bullish case is pretty straightforward: Supply may be reaching a peak while demand is still growing.
Traders wishing to benefit from a run-up may want to consider buying active-month corn futures on the CME and rolling them forward to later-dated ones as each contract nears expiration. Alternatively, it might be worth considering the Teucrium Corn exchange-traded fund (ticker: CORN), which holds corn futures.
Increases in supply have been dramatic in the last decade, but there are no obvious ways for that to continue with prices so low. Global production hit 1.03 billion metric tons in the current growing season, up from 716 million tons a decade ago, according to estimates from the U.S. Department of Agriculture. Read more here.