Bean Oil Spreads

Discussion in 'Commodity Futures' started by CrackPipe, Aug 27, 2011.

  1. CrackPipe

    CrackPipe Guest

    So I've built me a cost of carry calculator and so far so good.

    Looking back, turning points are pretty text book at the 65-70%+ cost of carry for corn, wheat, soy beans.

    Not Bean Oil though!

    Does anyone have any experience of Bean Oil - it would seem that Bean Oil sometimes goes past full cost of carry, which 'in theory' shouldn't happen as 'the market abhors a risk free profit as much as nature abhors a vacuum' as C Smith wrote!

    The only possible error I can see is my quote values. If bean oil is quoted as 57.49, that means $0.5749 right (if corn is quoted as 760-6 that means $7.6075)? However if I use 0.5749 format, the spreads get nowhere near full carry ever. If I use the 57.49, thats when they go over full carry at the spread lows.

    it would seem im trying to fit the quotes to generate trades - a bad move, but id appreciate if anyone could clarify from their experience.....

    cheers....