No trading again. No values strike me as compelling. More speculators climbing into commodities--which is OK, I mean the Fed gave us all a strong push in that direction. And it is too soon to fade the speculators, so I'm reading and waiting.
According to the DTN/Progressive Farmer website, the KCBT is modifying its wheat contract's delivery specifications in an attempt to induce closer convergence at futures expiration. I don't see how raising the quality requirements for futures would make them less attractive or the physical wheat more attractive. When there is an enormous amount of financial speculation in a commodity contract, especially one where nobody ever has to take delivery of the physical, the futures will have to trade up to attract more sellers. As long as the market is at full carry and delivery is shipping certificates with a modest penalty for deferral, the cash/futures basis will be forced out to very wide levels.
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