The cash premium for Hard Red Spring wheat has declined to around $2.40 over Soft Red Winter, and July MGEX has dropped to less than $1.40 over CBOT. However the calendar spreads are still quite firm for MGEX and Duluth inventories continue to decline.
At this point I still believe that there is some short covering on CBOT that is forcing that market upwards more quickly than MGEX. But it has been a somewhat painful theory for the past week.
My biggest current worry would have to be rebalancing of commodity indexes next week which could spur significant CBOT buying. Oh dear.
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