Back after a week and I have none of the "long-term" positions that I put on back on November 29. All were winners right from the start and none have really stopped. So why am I flat?
Fear, mostly. Two of the three positions involved being short corn. The third, long March MGEX wheat/ short KC Wheat has added about 20 cents in 5 sessions; so while it's looking great, if the premise of the trade was a limited downside from 10 cents premium MGEX, there is now a lot more risk. With a USDA report due out, I don't really want either the short corn exposures or the newly hefty MGEX premium exposures.
One new position added today, on the smallest scale: long Jan Ethanol/ short corn. Ethanol calendars spreads have been in backwardation for most of the last few months, so I think the current inventories would have to be described as fairly tight. And these are the lowest ethanol crush levels in months. With sugar in the stratosphere and gasoline going on the up elevator with crude, it seems like ethanol could perform very well with any positive news at all.
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