A single options trader has placed a bet exceeding $20 million, wagering that corn prices will climb to their highest level since 2023. This move comes as U.S. farmers are reducing their corn planting acreage for the spring season, even while corn exports are hitting record highs.

On Wednesday, a significant options trade was executed on the Chicago Board of Trade involving 105,000 November $5.50/$6 call spreads, representing a position on over 500 million bushels of corn.

Crop development in the U.S. has been hampered by a severe heatwave, a critical issue as July is typically the most important month for crop growth. With U.S. corn planted acreage falling to its lowest in two years, analysts have previously noted that any further decline in production or continued growth in demand could propel prices upward.

On Wednesday, December futures rose 2% to $4.8475 per bushel, marking an 11% gain for the month so far. The most actively traded futures contract last traded above $5.50 per bushel back in July 2023.

This substantial bet would begin to pay off if corn prices rise nearly 15% from current levels to reach $5.50 per bushel. The maximum potential profit, if prices climb to $6 per bushel, is estimated to be around $250 million.

The sheer scale of the trade has sparked market speculation that the trader is likely a hedge fund or another large institutional investor, rather than a commercial end-user executing a routine hedging transaction.