Formulating Strategery

We have the strategic positions we want: long hard wheat(MGE and KC) vs short soft wheat (CBOT). The levels are attractive on a historical basis and we have an upcoming event--the new Variable Storage Rate regime at the CBOT-- to help drive valuations in our favor.

In addition to intermarket wheat spreads, we will look to actively trade calendar spreads on MGE and KC on an intra-day basis. While the CBOT calendar spreads should continue to be quite volatile, the smaller exchanges still have their fixed storage rates and have traded out to full carry (or very close). So the July 10/ July 11 period in MGE and KC spreads offer a chance to bet on a tightening of supply with very little or no downside. This isn't my idea for a strategic position, but rather indicates that I will enter short term positions on the side with the more limited risk.