Let's Play Jeopardy!-- Category: Oats Trading

Alex, I'll take Bad Trades for $1000.

After saying I would hold on to my long oats/short corn position, I dumped it on the opening today. Later in the day, I tried to get back as oats and corn traded up, but I never paid up enough.

One place I have been patient is in the long Dec MGEX/ short CBOT trade; both the MGEX and the KC futures continue a pretty steady climb against the CBOT. With the Dec MGEX at a discount to KC, I still like being long the MGEX the best. Cash Spring wheat is trading a full 60 cents over cash Soft Winter Wheat, so the 27 cent Dec MGEX premium to the CBOT still seems conservative.

The Dec ethanol contract looks like a fantastic bull market...but it's not quite keeping pace with Corn. Not losing much, but barely keeping up. I like holding the long Dec ethanol/ short Corn at these levels and would like to hold through the gov't rulings on raising the blend wall to E12 or E15...