Here Comes the Crop Report

MGEX wheat looked like it would be the best performer at the open today, opening 3-4 cents stronger than KC or CBOT, but gave most of that back by the close. In fact, by the end of the day, MGEX was lower against the KC while maintaining gains against CBOT. My guess is that these movements are nearly random as market participants adjust toward the positions they want going into the USDA numbers coming out Thursday.

Being long May/short July MGEX was a thorn in my side today as the spread drifted toward 10 cents contango. Well, that stinks.

Though I don't have any position, the July/Sep rice remains interesting with a 17 cent range over the last 2 days. Since May/July has had only a 1 cent range, it seems clear this is not about supply/demand of rice, but about the particulars of the warehouse receipts and the new contract specs.