Another Leg Higher on the MGEX Wheat

It's hard to see the commercial reasons for Dec11 MGEX to trade at $3.20 over CBOT and 85 cents premium to March12 MGEX, but that's what traded today. While WheatSpreader notes that the Dec MGEX premium is having an impact on the high-protein end of the Hard Red Winter Wheat market, there still has to be a chuck of anticipated Hard Red Spring wheat that's gone missing for commercials to need to cover at these huge premiums.

Very interesting that it is "commercials" (bona fide hedgers) that are driving this rally. Open interest is very low overall and non-commercial long positions are at quite low levels. Unfortunately, the trading action of the last two days will not be in tonight's CFTC COT report, but that report will be interesting nonetheless.

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