Registered: Jun 2012
07-09-12 11:43 AM
Your prime rate seems a bit high to me given how low rates are.
One of the problems of CoC is that you never know how much say Bunge, Dreyfus etc are financing their inventory at. Given their size, they can probably negotiate rates better than the prime rate, maybe they get closer to LIBOR + 1 bp? Prime rate is for Joe farmer. Thats one of the issues - you'll be unlikely to find out the financing costs of those who control the market.
I spent a few months fiddling round with CoC in corn, wheat and beans, but could never get anything meaningful. Maybe I never put enough time/thought in to it. Beans especially seemed to never reach anything close to CoC before reversing.
I'm also kind of limited to the number of spread combinations. Front month - other months where there is liquidity, but the second and third months move more like Eurodollar spreads - not much bang for the buck. It pretty much leave me with old crop - new crop in each of the 3.