Trying Not to Overstay My Welcome

Wheat dropped along with other commodities today and the premium for March MGEX stretched to new highs. While I expect March MGEX/CBOT may eventually get as high as the current Dec10 spread (around 75 cents), it may take a while. So I pitched out 70% of my position as the premium expanded past 55 cents. I also squared up against KC.

Once again, the calendar spreads did not indicate a bigger surplus of wheat to store going forward. Instead, the calendar spreads flattened slightly. Once we get past the current QE2 driven volatility, the grain markets look poised for more bullish action eventually.