What explanations can you off for the sept wheat contract out performing the March today? Is it a fundamental that I am not seeing, or is it simply that the Sept contract was pulled up with corn more than the latter months? Insights much appreciated, thanks. Here to learn
I dont get where the 'today' in your post comes from. Fundamentals arent really responsible for day by day activity if your asking about one particular day - unless shock news hits of course - which would cause a bigger move. Looking at MRCI, I'd say one of 2 things: 1. The seasonal rally in u12-h13 has occurred 2.5 months early this year 2. The drought... What do you think?
there will be no drought, check the historical records, it almost always rains, and I will bet my life fortune on it! oh wait, I already did that, that is why I had to get a job and am now just a little forex trader.
Yeah, that's my point exactly. Fundamentals should not have influenced the spread that much in a single day. There was a big move in the underlying, but unless something fundamental changed, the spread did not have a reason to sustain its move in the short term. It looked like an opportunity to fade the move. In retrospect, it was. I was looking for confirmation from others that I had not overlooked something. I guess I should have traded it, but then again, it probably would have moved further the other way had the market actually seen me make a trade... It tends to look for my trades and purposely move against them!
My guess is that it was simply a technical correction. Perhaps spread traders taking profits, or one leg getting out of synch with the other and it will revert. Perhaps an opportunity to buy more spreads?