More Returning to Normalcy

MGE Wheat futures were about 4 cents stronger than the CBOT today, gaining while the CBOT finished in the red. Surprisingly, the Sep MGE contract, which has been weaker than KC or CBOT, has the tightest spread vs Dec of the three contracts. Sep/Dec MGE was only about 16 cents premium Dec, while Sep/Dec KC was 17.50 and Sep/Dec CBOT was 31 cents. Storage at the MGE is about 5 cents/month, so there is little left for interest on capital after delivery fees (vary by broker). Again, this is surprising given that Sep is when the Spring Wheat harvest should be arriving...if ever the MGE should be at a full carry, including a generous rate for interest on capital, it is this September.

By the way, I think that $85K, traded this week, is a great bargain for MGEX seats. I think they're worth double that when you add up the pieces--real estate, cash, trading revenues...unclear when the "liquidity event" might arrive, but I believe a majority of members would welcome an offer from a listed exchange business such as ICE, which bought the old Winnipeg exchange.