The CBOT outperformed on the upside, but not by a lot. I have added some some "tail hedges" over the last few days; I own a few more MGEX longs than I have CBOT shorts. This pretty much neutralized the adverse intermarket spread move for the day.
In addition to buying Dec/selling Mar in Oats, I have also added a similar spread in Corn. While I'm not enthusiastically bullish about corn (primarily because of the large non-commercial long position), there is so little downside on this calendar spread, I think it is worth a shot.
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Can you post a link that shows historical ethanol crush spread charts? My quick Google search resulted nothing. Thanks!
ReplyDeleteAre you playing ethanol anymore?
I am still trading ethanol, though in pretty small size. Back on August 24, I mentioned that I went long Dec ethanol vs corn and since then I have added a little at a 3-4 cent better level.
ReplyDeleteThe CME puts out a very good weekly report on ethanol that includes a lot of links to related news stories and a set of ethanol charts.
I can't really display just the chart you want, but it is on the bottom half of page 14 in the CME Ethanol Outlook Report of September 6, 2010: http://cmegroup.barchart.com/ethanol/
This is a 5-year chart, so it's hard to see detail. Also, it appears to be a "rolling futures" chart; the recent drop in the ethanol crush on the chart reflects the premium September contract being replaced by a new lower priced ethanol futures contract.
The ethanol - (corn/2.8) crush doesn't get a lot cheaper than the 15 cent premium we are seeing for Dec ethanol these days.