Here on the first delivery day for May MGEX wheat, we see the May contract trading at a strong 8 cent premium to July. July, in turn, is 2 cents premium to September. Backwardation! Every bull's favorite term structure.
KC and CBOT May contracts are trading at steep discounts to July -- and July at even greater discounts to September. Part of this is the regular seasonal pattern where the new crop for MGEX doesn't arrive until September, but weather concerns and quality concerns on KC and CBOT are also playing a big role. So I am pressing on with my long July MGEX/short KC and CBOT intermarket spreads.
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