Sep CBOT wheat was popular again today. The crop is well on its way to a good harvest on top of a big inventory. Spring wheat (MGE) there's some uncertainty left on weather; Corn demand is very strong; Oats have weather issues and a smaller crop planted....but Winter wheat, all you're looking at (if you're outright long) is high storage fees for a long time.
Well, I guess this is the beauty of the wheat market today--opportunities galore. While managed-money shorts have to cover on rallies, the commodity index longs will ignore wheat market fundamentals, charges and other technicalities and keep holding Sep CBOT until the beginning of August.
Sep CBOT outperformed MGE by about a nickel, crunching the spread into about 25 cents by the close--July11 MGE traded at less than a nickel over CBOT. While it is certainly possible that July11 MGE could trade at 15-25 cents under CBOT, it's very, very unlikely to finish there. Unless crackers start trading at a premium to bagels...
Subscribe to:
Post Comments (Atom)
Posts
When I read the title to this post I just had to laugh because the same thoughts were going through my head. Today was just one of those days where I couldn't do anything right. Came in with uzh wheat fly (long wings) which worked on the open but fell apart the rest of the day (went home with them regardless). Got ran over trying to bearspread z/h and u/n11. Whoever that buyer is in u/n11 (dreyfus I think) is definitely getting hurt and running out of bullets to mark the close.
ReplyDeleteAm bearspread u/z, u/n11 into report and long wings in uzh fly. (will take rest of u/z off pretty soon if it cant trade through 29)