• The corn futures market shows a number of similarities to what we saw during the same time frame a year ago. 

• Because of Chaos Theory, I do not believe in such “analogous years”. 

• That being said, there is enough market structure to support long-term long positions in the corn market at this time. 

As we come to the end of the first week of September, meaning the first week of the new quarter of the new marketing year, we can take a moment to evaluate how our theoretical long-term investment positions in the corn market are doing. As you’ll recall, my investment market of choice is indeed corn for a number of reasons including Peter Lynch’s advice of “invest in what you know” and my own belief that corn is the bonds (as in Treasury, not James) of the Grains sector. And while I recently asked the question if the National Cash Index could hit $2.50, my long-term investment strategies in the market have not changed. For the record there are two avenues I look at: A December contract only futures fund and the Teucrium CORN ETF ((CORN). Today, I’m going to focus on the futures market. 

From a technical analysis point of view, the Dec-only continuous monthly chart turned bullish at the end of August 2024 based on the completion of a bullish spike reversal. This ended the previous long-term downtrend that began at the end of May 2022 as a bearish spike reversal was completed. Along the way, the nearby December futures contract fell from $7.1150, the Dec22 contract end of May settlement, to the Dec24 end of August 2024 close of $4.01. Having ridden the market down (Market Rule #1: Don’t get crossways with the trend), it was time to go long the Dec24 issue at the open of September 2024. This long position would’ve been held until late October before being rolled ahead to Dec25 (ZCZ25) at a carry of roughly 25.25 cents. 

The fund would’ve stayed long Dec25 through early February 2025 when market developments led to another roll forward to Dec26 (ZCZ26) at a carry of 2.0 cents. From there, the Dec25-Dec26 spread collapsed, eventually posting a low daily close of 49.5 cents carry on August 12. Meanwhile, from February through July there were a number of opportunities to add option strategies, taking advantage of both seasonal tendencies and implied volatility readings (both part of Market Rule #3: Use filters to manage risk). The last of these option positions was put in place from mid-July through early August: Buying Dec25 $4.20 calls at 20.0 cents or less. As August came to end, the fund was then theoretically long Dec26 futures (at roughly $4.6225) and Dec25 at-the-money call options.

Why be long corn long-term? Market Rules #2 (Let the market dictate your actions) and #6 (Fundamentals win in the end). A look at the corn market’s Cost of Carry table at the end of August showed: 

• The Dec25-March26 spread at a carry of 17.5 cents and covering a neutral 56% calculated full commercial carry
• The Mar26-May26 spread at 10.0 cents and 47%
• The May26-July26 spread at 6.0 cents and 28%
• Putting the Dec25-July26 forward curve at a carry of 33.5 cents and 46%

What stood out to me was the fact the commercial side was bullish corn for Spring 2026 likely on the seasonal tendency for supplies to tighten during planting season in relation to demand. At the end of August 2024, the 2025 edition of the May-July futures spread also closed covering 28% calculated full commercial carry, helping to push the National Corn Index ($CNCI), the national average cash price and intrinsic value of the market, to highs near $4.7050 in February 2025 and $4.6275 during May 2025 after finishing August 2024 at $3.6850. The National Corn Index was priced near $3.7925 at the end of August 2025. 

Again, why be long corn long-term? 

• Fundamentally, the market is bullish next spring, a fact that could bring new buying interest to the futures market.
• Technically, the December futures monthly chart is at best showing a long-term uptrend, at worst a sideways trend between the August 2024 low of $3.85 (Dec24) and February 2025 high of $4.7975 (Dec25). As of this writing Dec25 is priced near $4.23 with Dec26 at $4.61.
• Noncommercial traders were last reported holding a net-short futures position of 70,940 contracts as of Tuesday, August 26. A year ago funds held a net-short futures position of 148,530 contracts before moving to a net-long of 468,720 contracts the week of Tuesday, February 18. By that time we knew the US would be planting more corn acres in the fall of 2025 (by tracking the Nov25 soybean/Dec25 corn futures spread from the first weekly close the previous September through the last weekly close of February), and Watson started moving back to a net-short futures position. 

Because of Chaos Theory, an unexpected change at a key time creates a different result, I am not one to say a market will repeat itself from one year to the next. However, this time around the calendar the structure of the corn market is similar enough to view last year as a guide rather than an absolute (recall the Vodka Vacuity that tells us there are no Absolut(e)s in the market).