In recent posts I have mentioned that the smaller CBOT Dec10/July backwardation and smaller premium for Dec CBOT over MGE as steps towards normacly. Still, does anyone really think that May11 CBOT will go off the board at a premium to July11? Or that Dec MGE will end at a discount to CBOT?
We are still in a period of chaotic pricing for wheat futures, with unsustainable price levels in a whole variety of relative value spreads.
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Haven't posted in a while.....actually not trading currently as have been busy with a few other things.
ReplyDeleteDefinitely weird price action today.....im scared to death to bearspread this stuff. It makes sense but something is up with this contract. We are at a point where this price action isnt going to just reverse itself.
Bearspreads are probably still the right idea as a shortage of receipts is very unlikely for every delivery period but would imagine spreads stay supported until right around roll then start to come off hard and go out to their respective carries.
Put my toe back in the water on the calendar spreads today. Since I think there will be grain in storage for a long time to come, I went right for the big, fat May11/July11. How often can you hope to make 50 cents on spread like this? (How often is it this risky?)
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