🕒 Market Overview: A long call position on DBA for the heart of the 2026 crop year could offer value if grain and oilseed markets are poised to recover.

📈 Sector Insight: Agricultural commodities feed and increasingly power the world. Inflation at 2.7%, lower short-term U.S. interest rates in 2026, a weak U.S. dollar, and weather uncertainty favor the upside for agricultural commodity prices. The DBA $28 call option for July 17, 2026, expiration, at $0.50 or lower, provides exposure to this sector of the commodity asset class.

💡 Today's Trade Idea: Bull Call on DBA.

SMART TRADE IDEA 💡

Bull Call on DBA

Trade Setup:  Buy $28 Call for July 17, 2026, expiration.
Cost: $0.50 ($50 per option)

• Max Profit: Unlimited

• Breakeven: $28.50 on DBA on July 17, 2026.

• Risk-reward: 1:1.5

Management Plan: Spread to a higher strike price, or take profits, if DBA’s price reaches $29.25 before July 17, 2026.

NOTE: Remember, options trading involves substantial risk and is not suitable for all investors. Consider your investment objectives, financial resources, and experience level before implementing this or any options strategy.

DISCLOSURE: Trade recommendations may have changed since publication. Evaluate current market prices and risk/reward before acting. Trading involves significant risk and is not suitable for everyone. This is not personalized investment advice. Past performance doesn't guarantee future results. Publisher and contributors may hold positions in recommended securities. Readers assume full responsibility for their trading decisions. Consult a financial professional before investing.

What depressed grains and agriculture prices are quietly setting up for 2026

Commodities are highly volatile assets, and the agricultural sector, including grains, oilseeds, oilseed products, soft commodities, and animal proteins, often exhibits the highest price variance. While the softs and proteins are emerging from a period when prices rose to multi-year or, in many cases, all-time highs, grains, oilseeds, sugar, and cotton prices remain depressed, with the cure for those prices being those low prices. Production costs have increased across all agricultural commodities amid elevated inflationary pressures. Therefore, adding some agricultural commodity price exposure to portfolios makes sense in the current environment. 

Soft commodity prices have mostly declined

World sugar and cotton futures prices have been under pressure throughout most of 2025. After reaching new record highs in 2024 and 2025, futures for Arabica coffee, cocoa, and frozen concentrated orange juice have declined substantially.

The soft commodity sector was 19.25% lower over the first nine months of 2025. 

In late Q4, prices were lower than at the end of Q3.

Animal proteins- Cattle futures fall from record highs

Live and feeder cattle futures rose to new all-time highs in 2025, while lean hog futures remained below their record peak.

The sector was over 27% higher over 2025’s first three quarters, but prices were mostly lower in late Q4.

Winter is the offseason for animal protein demand. 

Signs of bullish life in grain and oilseed markets after falling to low levels

The grain and oilseed sector, including soybeans, soybean meal, and oil, and CBOT soft red winter wheat futures, was 8.85% lower over the first three quarters of 2025.

Prices fell to multi-year lows after reaching highs in 2022.

In late Q4, grain and oilseed futures were mostly higher than at the end of Q3. 

Commodity cyclicality favors the upside for grains- Each year is a new adventure

Commodities are cyclical assets.

In bear markets, prices tend to fall to levels where production declines, inventories drop, and consumption increases, leading to price bottoms.

In bull markets, prices tend to rise to levels where production increases, inventories grow, consumption decreases, and prices reach tops.

The price action in softs and meats reflects cyclicality that had led to peaks. The price action in grains and oilseeds could reflect cyclicality in 2026.

A trade recommendation for grains in 2026

The Invesco DB Agriculture Fund (DBA) has a diversified exposure to 13 agricultural products.

At $25.50 per share, DBA is a liquid ETF with over $734.6 million in assets under management. DBA trades an average of over 188,000 shares daily and charges a management fee of around 0.90%.

Source: Barchart

DBA has been in a bullish trend since the June 2020 pandemic-inspired low. Agricultural commodities feed and increasingly power the world. Inflation is increasing production costs, and tariffs are trade barriers that can distort prices.

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