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We have a couple of main positions: long Sep MGE/ short KC and short Dec10 CBOT/ long July11 CBOT. Both spreads stayed within a penny of yesterday's prices for most of the day.
On the MGE vs KC position, we are not in at some great level where we can relax and count on time being on our side. We are long at the highest level for that spread in months. The revelation that Canadian farmers didn't plant a big chunk of planned acreage has pushed MGE up by about 10-15 cents vs KC and CBOT and that premium has held up at these new levels for a good week now. The oats market is more sensitive to Canadian production problems than MGE Spring Wheat so I'm hoping the 5% rise on oats today, to new highs, is a harbinger of further MGE gains vs KC and other lower protein, winter wheat.
On the calendar spreads, we can be somewhat more comfortable, though there is no hard number supporting forward premiums. The winter wheat harvest is almost 20% complete with generally favorable weather conditions forecast for the weeks ahead. There is a large inventory of winter wheat and a good crop almost in the bin. While spreads have scraped themselves up off full carry at the KC (by a few pennies), there shouldn't be much concern over any shortage of winter wheat for a year at least.