After briefly seeing premiums above $2.40 over CBOT for Dec MGEX and near $1.50 for July12 MGEX yesterday, the intermarket spreads swooned to around $2.10 for Dec11 and $1.25 for July12. As I was mentioning yesterday, the CBOT contract seemed prone to short-covering and as other "risk" assets rallied around the globe, the CBOT wheat contract found more support than KC or MGEX.
Maybe I should be more patient. With Dec11 MGEX still trading at 20+ cents premium to March and deliverable stocks at Duluth only trickling in, I got got back in long MGEX vs. CBOT. The closing levels looked like a bargain compared to the prevailing levels for most of the day. So maybe I will lighten up if there isn't a bounce at the open tomorrow...bargains are prices that aren't available for a long time.
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