The wheat futures continue to skyrocket. Cash markets, not quite so much. The CFTC reviewed the KCBT convergence problem --futures are a full $1.50 over cash even before today's rally--and declared that, someday, somehow, they should fix that. No particular deadline.
http://www.reuters.com/article/idUSNLL5JE6BE20100805
So with Russia and Ukraine deciding to tear up their contracts, and the US futures only loosely tethered to the cash markets, we have a recipe for fantastic futures market volatility. Eventually, it will rain in Russia; Russia will get back to marketing their surplus wheat; hard wheat will trade at a premium to soft wheat. But not today, and not likely tomorrow either.
Subscribe to:
Post Comments (Atom)
Posts
Spreads totally rocking today! hk and kn trading 25 and 30 over.....liqudity GONE!
ReplyDeleteI agree have to look to be long the hard wheats over soft soon I think but not yet....in 07/08 they blew em out to around -50 which im sure you remember (know a lot of guys that ended their careers on that move) and then only to see the spread reverse and spring wheat trade dollars over.
aug/sep was the bottom for that spread in 07/08 before it was good to put on.....might try a little if we can blow out to -25 on that spread which might happen sooner than later by the looks of it.
Hearing trains loading tons of low protein DNS into chicago for delivery question is will somebody come after the receipts? If so that will be a huge signal from the market but I doubt it happens.....however receipts quietly being cancelled here in chicago.
None the less a great time to be a grain spreader. Have you been getting those emails?
Yes, the emails are great, thanks.
ReplyDelete