As I predicted last Friday, I am getting back in long MGEX vs CBOT wheat futures. My gut feeling is that I should wait longer, since it has only been a couple of days of correction. But $1.10 premium for July12 MGEX and 65 cents premium for Dec12 MGEX are pretty substantial falls from the $1.50+ and 90+ cents respectively seen last week.
At the front end, it was a little harder to pull the trigger and go long Dec11 MGEX at $2.50 premium, but the Dec11 contract continues to stay at over 40 cents premium to March and very few bushels are showing up at the Duluth warehouses, so we took a shot.
My main worry, as usual, is the speculative short positions in CBOT wheat. So once again I am adding a small outright long tail hedge.
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