West-Central Missouri | white shadow - 5/4/2025 10:41
Basis first, spreads second and futures last. Spread is inverted between the July and August---no carry, they want beans today. Inversions can run forever higher. Old crop higher than new crop. .
So i have always had questions about the quote above and now i have someone to deciper it for me.
So start with basis first. How big of an area needs basis to move before spreads start moving? At what point does basis adjustment just go from a geographical grain shuffle to a futures market mover?
“Spreads Second” refers to the front month moving higher compared to further out months, or is it more old crop to new crop comparison?
When spread inversion happens, is it bullish if the inverse is caused by further out months dropping while front month stays the same?
“Futures last” refers to futures going higher in which month? Front month only? Wouldn’t that happen simultaneously to the spreads going inverse?
Also how do we interpret this CZ25 to CN25 chart movement over the last week? Is that a result of the front month switching from May to July or is there another factor?
Thanks,
Edited by gbryce 5/7/2025 20:53
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Pricing picture going forward, based on facts today........
