The Next Big War Trade 🪖🚀

🔔 MONDAY MORNING UPDATE 🔔

I checked the headlines before the bell and decided to hold off on entering this position until we see how this news all shakes out (this is why I discussed keeping an ear to the ground at the end of the post).

[embed]Live updates: Iran threatens to attack Middle East electrical plants powering US bases Iran on Monday threatened to attack Mideast electrical plants powering American military bases as U.S. President Donald…apnews.com

With the strikes paused for 5 days, oil prices are tumbling and in turn so is $CORN and $WEAT. I’ll be keeping an eye on the news and see what comes of this in a few days. If an agreement is reached, the trade is off, if it all falls apart and bombings continue, I’ll move forward.

Alrighty folks, the world is an absolute dumpster fire right now, and the only certain thing is that… well… nothing is certain. But where there is geopolitical chaos, there are massive investment opportunities setting up on the charts. And for those of us that missed the oil stocks boat (pun intended) I’ve got a new trade for ya…

That’s right, it’s $CORN! And it just might be the ultimate macro play setting up for Monday morning. Let’s take a look… 👀

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What I Like About Corn 🌽

Corn is not just a big lump with knobs, but it does got the juice!

The war in Iran is choking global supply chains. The Strait of Hormuz is effectively blocked and crude oil has surged. This has the market in a panic. Every time someone says the “T” or “W” words, the broader market tanks. Commodities, however, are quietly building massive Stage 1 bases. Let’s take a look…

The Chart

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This is the monthly chart for $CORN. Price closed above the Moving Averages which ALSO are about to flip. This is a classic Stage 1 to Stage 2 Breakout! But what you should really be taking notice of is that giant Volume bar on the right.

• Institutional Volume: $CORN just printed a 16.5 million share volume spike. Retail traders do not make that happen. That is massive, aggressive institutional accumulation.
• The Crossovers: The price closed at $18.80, decisively crossing above both the 5 EMA and the 20 SMA — which are also flipping.
• Momentum: The RSI is sitting pretty at 49.78, crossing the midline with plenty of room to grow before hitting overbought territory.

What does corn have to do with the war?

The chart tells us what is happening, but the macro environment tells us why. Corn isn’t just a food; it’s getting hit by a “perfect storm” from three different angles:

1. The Fertilizer Shock (Natural Gas): Corn requires massive amounts of nitrogen fertilizer to grow. Nitrogen is made from natural gas. With the Middle East conflict threatening natural gas supplies, fertilizer prices have skyrocketed. When fertilizer gets too expensive, farmers plant less corn. Supply drops.
2. The Ethanol Arbitrage (Fuel): Roughly 40% of US corn is refined into ethanol for gasoline. When war spikes crude oil prices, gasoline gets expensive. Refineries aggressively buy cheaper ethanol to blend into the gas to lower costs. Demand spikes.
3. The Global Shipping Premium: With shipping lanes in the Middle East disrupted, the world bids up safe, North American agricultural assets that don’t have to cross a war zone.

My $CORN Game Plan

Here’s how I’m applying my trading style to this setup. I’ll avoid buying the premarket — the liquidity is a ghost town for this ETF. Instead, I’ll wait until 10 minutes or so after the bell when the chaos settles and grab the first half of my position.

• Entry 1: Buy 50% of the position near the open (around $18.80). The Daily chart shows that the breakout has already happened and RSI is almost at 70 but this is a long play and I don’t want to miss the boat so I want to get on the board immediately in case it gaps up and runs.
• Entry 2: Set a “stink bid” Limit Order for the remaining 50% at $18.15. Breakouts love to pull back and kiss the 20 SMA. If it dips, this order will scoop up some shares at a discount. Again, the daily chart is currently almost at 70 RSI so we may see a pullback and we want to DCA down if it does retrace.
• Stop Loss: $16.80 I may try to do this manually and wait until that price is confirmed on a Weekly Close, so around 15 minutes before the bell on a Friday. This will prevent getting tricked by news rumors that cause the algorithms to panic and thus get me shaken out of the trade. If it breaks below that psychological support, the breakout failed, the thesis is dead, and we move on with only a 9% loss (but there is risk of a gap down — but these are rarer with commodities).
• TARGET 1: $21.50–$22.00
• TARGET 2: $25.00+
• RUNNERS: Maybe leave a few runners in case it keeps going, but set the stop at the Target 1 or 2 price to protect the gains.

What if there’s no Dip and the Stink Bid Doesn’t Trigger?

This is where amateur traders let FOMO ruin their accounts. If the price takes off and my $18.15 order never hits, I won’t chase it. My first 50% is already printing money, so I’ll just enjoy the gains. If I were to itching to get the rest of of my cash int he game, I’d need one of these two scenarios:

• Scenario A: On the Daily chart the stock would need to have 2 or 3 red days and bounce off the Daily 20 SMA then I’d that “Higher Low.”
• Scenario B: If it shoots up to $20 and chops sideways for three weeks, I’ll let it build that base. Again, looking at the Daily chart, I’d buy the secondary breakout once it breaks the Resistance of that new consolidation zone.

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Bonus Buy: $WEAT 🌾

I also checked out some related tickers ($CF, $MOS, $NTR, $ADM, $BG, $WEAT) though only one stood out to me: $WEAT which is setting up with a nearly identical, gorgeous monthly chart.

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Wheat is the ultimate “war commodity.” While it doesn’t have the ethanol/fuel catalyst that corn does, it carries the Global Panic Premium. When supply chains are threatened, nations hoard wheat to prevent famine. Back in 2022 at the start of the Russia/Ukraine conflict, $WEAT exploded from $35 to over $63 in weeks. When it runs on fear, it runs violently.

• Entry 1: ~$22.85 (near the open)
• Entry 2: $21.90 (catching the 5 EMA)
• Stop Loss: $19.50 — Hard stop, NOT manual.
• Target 1: $32.00 — this number is retracing half of that historical panic spike ($63). If it hits this level, the volatility will likely be out of control. Take 100% of your profits here and step away from the casino table.

What about getting both?

II’ll be putting money into both of these but not splitting them 50/50.

I’m going with a 75/25 Corn to Wheat ratio. Why? Because $CORN is the superior, fundamentally sound beast with the triple threat multiple catalysts (Food + Fuel + Fertilizer).

$WEAT is incredibly volatile. It can gap up or down $3 overnight on a single news headline. By keeping my $WEAT position smaller, I limit my exposure to that choppiness, but because of its explosive nature, that 25% position still acts as a massive lottery ticket if global food hoarding kicks in.

But if Corn is a stronger play, why bother with Wheat?

While they are similar on a macro level, they are very different on a micro level:

• Corn relies heavily on US weather, if the weather is great and corn crops flourish the supply goes up and the price goes down. Wheat however is heavily exposed in Eastern Europe and acts as a hedge against perfect US weather.

NOTE: The US is experiencing some crazy weather right now that could very well affect the crops:

• While they are correlated and do runt together, they don’t run at the same speed. Corn is industrial and its price movement is slow. Wheat is visceral, when supply chains are disrupted and threaten the global supply, people panic out of fear of famine.
• Since fear drives wheat, a global crisis could potentially see the 25% wheat position explode and outperform the 75% corn position.

Warning Signs: Headlines to Watch Out For

I wish I had been smarter when all of Trump’s babblings about Iran began, because for those playing 3D chess, that was a sign to build a base position in oil stocks.

Well I have my signs for $CORN and $WEAT (the charts) but in order to REALLY play this smart, once in the trade I’ll be keeping an eye on the news for any early signs that things could reverse and go in the wrong direction. These include:

• War Related News: Ceasefire deals with Iran, ships allowed to pass through the Straight of Hormuz, etc…
• Energy/Fertilizer News: Anything related to more oil production increases, natural gas prices going down, etc…
• Agriculture News: USDA’s WASDE (World Agricultural Supply and Demand Estimates) report showing stockpiles of grains, or weather reports showing perfect forecasts in the corn belt for July, etc…

Anything headlines related to these topics would be a sign that my thesis may not hold. They’re not all created equal and may not require pulling the rip cord but rather tightening Stops or taking some profits.

And just because you probably skipped it at the beginning of this post, here’s this video for you to watch:

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Trade long and prosper!

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This is my personal opinion and not investment advice. I am not a Certified Financial Advisor.