MGEX Premium Crumbles

After yesterday's hard sell-off in March12 MGEX futures, it wasn't surprising to see that the weekly inventory numbers from Duluth showed that wheat is building there and not moving out. http://www.mgex.com/grain_historical.html

The price action in MGEX wheat yesterday was also crushing for the hopes of MGEX longs--a big move up early only to fail spectacularly into the close. Misery.

So March MGEX has lost $1 versus CBOT in about 6 weeks. Dump it? Well, I think no. The short-covering on CBOT has run perhaps half its course, while net longs at MGEX at very low. Inventories are still quite small for Spring Wheat while overall wheat inventories at very high. I like MGEX to outperform at paying $1.20 to $1.30 premium for July doesn't seem excessive when cash market premiums ares till $2.20 to $2.30.

Sticking with the MGEX.