So I lightened all my positions today. The steep backwardation in Dec/Mar MGEX continues to imply a very bullish story for intermarket MGEX vs CBOT spreads--particularly the deferred spreads like July12 MGEX vs CBOT which is at $1.25 compared to the $2.40ish level for Dec11 MGEX vs CBOT.
The futures market does not seem to be able to predict USDA reports reliably. We see very large volatility on the release of USDA reports, so whether the reports are accurate or not, they have been having a big impact on markets.
The only thing I am taking into the report is a scaled back long July12 MGEX vs CBOT.
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