With the rush toward "risk on" assets today, I thought it unwise to be short any nearby CBOT wheat. Only keeping a long MGEX vs CBOT position way out in Dec12 where MGEX is only 65-70 cents premium. I expect that many, if not all, CBOT shorts will be looking to cover if the markets continue to rally. So I am trying to stay out of the way.
Still looking for a tightening of Dec11 CBOT vs Mar12 as we go through the beginning of November. There are 15K contracts fewer passive index longs (compared to 3 months ago) to rollover and 40K non-commercial shorts that will be looking to roll or cover. My guess is that the current 35 cents discount for Dec is around 10 cents more than any commercial cost...
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