Sep CBOT wheat has dropped to 42 cents under December. There are likely over 100,000 Sep CBOT contracts still held by passive index investors and that accounts for the bulk of Sep long open interest and they are paired up with commercial hedgers that are short. It seems to me that it is quite possible that the Sep will trade down to the VSR full carry at 63 cents under December. So I added to that calendar spread position.
Nearby Sep MGEX wheat continues to show strength, now trading at a small premium to December. So with that bullish indication in the front end of the market, I added a new long Dec MGEX, short Dec CBOT position to my existing long Dec MGEX/short Kansas City position.
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