NIA's #1 favorite commodity corn saw its front month December 2020 contract gain by $0.1725 or 4.29% last week to settle at $4.1925 per bushel its highest weekly settlement price in 15 months. In fact, corn gained last week on all 5 trading days!
Out of the Top 25 most actively traded commodities on U.S. and London futures exchanges, based on each commodity's front month contract, corn has been the #1 best performer over the past month with a gain of 15.63%, followed by the #2 best performer wheat +14.84%, the #3 best performer sugar +14.64%, the #4 best performer cotton +11.44%, and the #5 best performer nickel +10.27%.
Corn priced in gold (real money) has now gained for a record 11 consecutive weeks, rising from an all-time low of 0.0014922 oz of gold to a current price of 0.0022006 oz of gold. Despite this HUGE rally, corn hasn't yet returned to its pre-COVID all-time low of 0.002296 oz of gold from back on September 5, 2019. For corn priced in gold just to return to its pre-COVID all-time low of 0.002296 oz of gold, corn must rise to $4.37 per bushel.
After bottoming on September 5, 2019 at a then all-time low of 0.002296 oz of gold, corn rapidly bounced to an October 14, 2019 high of 0.0026893 oz of gold, which would currently value corn at $5.12 per bushel. When corn last settled above its current price of $4.1925 per bushel back on July 24, 2019, corn was worth 0.0029784 oz of gold, which would currently value corn at $5.67 per bushel.
NIA's Teucrium Corn Fund (CORN) January 2021 $13 call option suggestion finished last week at $1 for a gain of 42.86% from NIA's August 25th suggestion price of $0.70. With 57 trading days left before expiration we believe NIA's CORN call options are likely to reach $3-$4 prior to expiring at the close on January 15, 2021.
When NIA first announced its CORN call option suggestion two months ago, corn's front month contract was priced $0.36 per bushel below its forward 12 month contract. Last week, corn's front month contract settled $0.26 per bushel above its forward 12 month contract, which is the #1 most accurate indicator that a major new bull market for corn is now underway!
The last time that this happened was over a decade ago on September 16, 2010. On that day, corn's front month contract brokeout to a level that was $0.24 per bushel above its forward 12 month contract, which was corn's largest 12 month spread in 8 years. At the time, corn's front month contract was $4.96 per bushel. Over the following nine months, corn's front month contract exploded by 61.62% to reach a high on June 10, 2011 of $8 per bushel!
Historically when corn futures enter backwardation like what occurred on Friday, hedge funds tend to load up on corn futures in the following weeks/months. Backwardation makes corn futures much more attractive to major investors because when it comes time to roll over a futures contract to the following month, instead of automatically losing value by buying a higher priced contract you may actually gain value by buying a lower priced contract that will soon adjust upward in price.
In recent months when corn futures were in contango, the CORN ETF underperformed corn's front month contract. Now that corn futures are in backwardation, we expect to see the CORN ETF begin outperforming corn's front month contract. This will allow NIA's CORN call option suggestion to really start making very large gains in the weeks ahead!
Past performance is not an indicator of future returns. NIA is not an investment advisor and does not provide investment advice. Always do your own research and make your own investment decisions. This message is not a solicitation or recommendation to buy, sell, or hold securities. NIA's President has purchased 737 CORN January 2021 $13 call options and may either buy more contracts or sell his contracts owned at any time. This message is meant for informational and educational purposes only and does not provide investment advice.