May MGEX wheat futures have about 20X the normal open interest for a contract with 4 trading days left to expiration. Since volume is nearly nonexistent in May at this point, I think it is fair to assume that deliveries will ensue. This makes sense with May futures 60-70 cents below cash. The deliverable MGEX wheat stocks have been dropping rapidly since the beginning of April and this trend will now continue through May. If we continue at this pace, MGEX deliverable wheat stocks will drop to less than 10 million bushels by June...with several months to go before any new Spring Wheat arrives.
There is no similar inventory or strong cash basis story on either KC or CBOT. They have their own bullish stories, but not nearby inventory stories. So I am continuing to bet on the MGEX to be the best performer of the three.
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment