Did anyone trade the Sep/Dec today. It went from -10 to +9 and then a half hour later to -2 and closed at +1. I have never seen anything like that ever in Chi Wheat. As a matter of fact it has never been that inverse in 30 years. With almost full carry upfront in July/Sep! The funds created a wonderful opportunity today. Days like today are why I am in the markets. There is still more though, just sitting there for the taking. Anybody trading/watching this happen? Minn/Chi---not yet (getting ripe) KW/Chi---probably soon Fun times in wheat.
I got hammered today. I came in long Corn and on the early fade I sold WN (below $6) as "protection". Jeez, after a buck move in 5 days I thought Wheat might consolidate a bit and trade lower on the day. Holy shit. I covered some in a panic as high as 6.16!!
ya I am currently long dec kc over dec chicago at -13. Look for it to trade somewhere in the range of 10-20 over chicago. Like you said minn chi spread is not yet ready but maybe an oppurtunity later in the summer or early fall. What people really don't realize though is that this hrw crop is fucked big time. The kc crop always leads the wheats after harvest so I expect it to rally over the other wheats to the end of the year.
youngtrader- History and wheat quality says your right. I noticed Sep MW has not been this cheap vs. Chi since the 1970's. This next Tues is where I see a turn maybe----I believe this next Mon crop conditions report is going to reflect what is happening up here right now with this MW. Way to much rain right now up here for us. This one could be a monster spread. I think the most telling sign for the Chi Wheat is the carry of July/Sep. This market is built only on speculation. A house of cards of sorts. Right now I am concentrating on the dec/sep mar/sep spreads. The other spreads KW/W and MW/W are like musical chairs---the music stops for the Chi when the funds get there fill on the long side and the spreads will then turn. Maybe today is the day?
foo, I agree with you 100% chicago tends to get really out of wack with the others because of all of the speculative interest in chicago. With harvest really getting underway in a week or so with the soft red winter crop I think you are going to start to see both kc and minneapolis trade at a substantial premium to chicago. Not to mention that the wheat corn spread is at or near 2 bucks now. Minneapolis appears to be doing ok but the recent rain fall is definatly something to consider hear. And rain continues in the southern plains delaying hrw harvest and promoting diseases. Currently sold a few august 7.00 chicago wheat calls for 16 cents. Seems to be the only play I like right now untill I see an oppurtunity for Minn/Chi spread.