Late this week, both MGEX and KCBT Dec Wheat futures closed at the best levels of the year with the exception of one day, the August 5 spike. The CBOT wheat finished around its average level for the period since August 5. So the MGEX is pushing 60 cents premium to CBOT while KC is over 50 cents premium. I like it and I think KC and MGEX especially will continue to outperform the CBOT.
If we look out to Dec11, we see MGEX wheat priced at even with to CBOT and KC at a discount--does anyone really think that is how they will settle in a year's time? No. That's where the high VSR charges force the forward curve. I'm happy to buy the hard wheat futures vs CBOT and wait.
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