Grain Spreads: Commercial Hedge Spreads
July 3, 2025
Commercial Hedge Spreads
We are looking for good risk to reward ratios using option spreads for low cost to entry, for the goal of catching bigger protracted moves in the underlying futures in our opinion. “The discussion of potential maximum profit does not imply the probable outcome of these trades.” The risk is the price paid for the call or put spreads plus all commissions and fees.
Bullish Strategies
Soymeal-Trade Deals
Buy the March 26 330 call. Sell the March 26 380 call. Pay 4 points or $400 per call spread plus commissions and fees. Maximum value at options expiration (2/20/26) if both strikes finish in the money is 5K, less trade costs and fees.
Live Cattle-Scarcity
Buy the December 2025 Live Cattle 225 Call and sell the December 2025 235 Call. Pay 1.50 per spread or $600.00 plus commissions and fees per spread. Maximum value at options expiration (12/05/2025) if both strikes are in the money is $4,000.00, less trade costs and fees.
Bean Oil (biofuels)
Buy December Bean Oil 56.00 Call and Sell the December Bean Oil 66.00 call for 2.00 OB or $1,200 per spread plus your commissions/fees. Maximum value at option expiration (11/21/25) if both strikes are in the money is $6,000, less trade costs and fees.
T-Bonds (Fed rate cut @ Sept FOMC)
Buy October T-Bond 117 Call and Sell the October T-Bond 120 Call for 0^40 OB or $625 per spread plus your commissions/fees. Maximum value at option expiration (9/26/25) if both strikes are in the money is $3,000, less trade costs and fees.
Natural Gas-Usage
Buy the December Natural Gas 6.50 call and sell the December Natural Gas 7.50 call. Pay 5 points or $500 plus commissions and fees. Maximum value at options expiration (11/25/25) is 10K less trade costs and fees.
Bearish Strategies
Gold/Silver-Economic certainties/trade deals
Gold-Buy the October Gold 3000 put and sell the 2900 put. Pay 3.30 or $330 plus trade costs and fees. The maximum profit at option expiration (9/25/25) if both strikes finish in the money is 10K, less trade costs and fees.
Buy the March 2026 Silver 26.00 put and sell the March 26 Silver 24.00 put for 6 points or $300 plus commissions and fees. Maximum value at options expiration (2/24/26) if both strikes finish in the money is 10K, less trade costs and fees.
Livestock Hedges
Buy the October Lean Hog 84 Put and sell the October Lean Hog 78 Put. Pay 0.80 per spread or $320.00 plus commissions and fees per spread. Maximum value at options expiration (10/14/2025) if both strikes are in the money is $2,400.00, less trade costs and fees.
Buy the September 2025 Live Cattle 200 Put and sell the September Live Cattle 190 Put. Pay 1.00 per spread or $400.00 plus commissions and fees per spread. Maximum value at options expiration (09/05/2025) if both strikes are in the money is $2000.00, less trade costs and fees.
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Sean Lusk
Vice President Commercial Hedging Division
Walsh Trading
312 957 8103
888 391 7894 toll free
312 256 0109 fax
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
Futures and options trading involves substantial risk and is not suitable for all investors. Therefore, individuals should carefully consider their financial condition in deciding whether to trade. Option traders should be aware that the exercise of a long option will result in a futures position. The valuation of futures and options may fluctuate, and as a result, clients may lose more than their original investment. The information contained on this site is the opinion of the writer or was obtained from sources cited within the commentary. The impact on market prices due to seasonal or market cycles and current news events may already be reflected in market prices.PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS. All information, communications, publications, and reports, including this specific material, used and distributed by Walsh Trading, Inc. (“WTI”) shall be construed as a solicitation for entering into a derivatives transaction. WTI does not distribute research reports, employ research analysts, or maintain a research department as defined in CFTC Regulation 1.71.