A couple of days ago I thought it was best to liquidate MGEX March/May wheat spreads because they would move from 60% of full carry out to 90%+ of full carry. However, as the cash/futures basis continues to narrow, with cash only 4 cents discount to March futures, I think there the risk/reward for long March/short May has changed. Now there is a real chance that March can go to a premium to May.
While the elevators have not been emptied, it appears that buyers are bidding their way to the front of the line--even though there is plenty of inventory, there appears to be competition to secure the physical. If cash goes to a significant premium to futures, it becomes very likely that the front end of the futures curve will be pulled higher.
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment