If this trader was at all typical of most grain traders, then the market was entirely concerned with developments in global equity and bond markets. The liquidation of "risk" assets including commodities was front and center all day. But not many macro investors own MGEX wheat, so the decline there was relatively moderate. And the MGEX premium to CBOT increased.
When the pendulum swings and the macro investors are back in buying corn and CBOT wheat (where they are short), it may be a bit tougher to own this spread. Hopefully, a few extra longs as a tail hedge will mitigate the effect of speculators rushing to buy Chicago wheat...but that day looks far off at the moment.
Subscribe to:
Post Comments (Atom)
Posts
No comments:
Post a Comment