Another Bite at the Oats

A month ago I said that I liked long March Oats vs Corn and the ratio moved quickly in favor of the Oats...and then all the way back. So we are getting another chance to buy pretty cheap oats: Oats at or below 62.5% of corn. That's my somewhat arbitrary threshold for cheapness. Certainly, oats can get cheaper--maybe all the way down to 50% of corn. If we saw that the corn market was tight and the oats market well-supplied, perhaps I would wait for more attractive levels. But today we have March/May Oats at 45% of full carry while Corn is 65-70% of full carry. So the Oats market, where Dec futures traded up to 20 cents premium to March, is clearly tighter...

I didn't have a lot of patience with the long July MGEX/ short CBOT--dumped it at the lows below 55 cents premium MGEX. Ugly. Still keeping the long Dec11 MGEX/short KC which is now available at better levels. Also keeping the long ethanol (now Feb) vs short Corn.