Wheat Futures Muddle Along

The premiums for MGEX and KC wheat have generally softened as the wheat futures have traded sideways near recent lows. Ag futures are not only not in the spotlight, they aren't even on the stage. Focus is on the euro, and oil and stocks...when it comes to ags, there is more interest in MF Global than any actual crops.

One calendar spread that has caught my eye is the Sep12/Dec12 on KC which is trading at the same level as the same period on the CBOT. While that isn't a crazy level, it seems to me that there is a far greater likelihood that the contango for CBOT could steepen toward 40 cents or more, while full carry for KC will top out at 30 cents.