|
| Okay. Good question as I am watching it & do trade that spread. In fact I just unwound long july/short dec a few days ago. In the final analysis, that spread is a function of the amount of old crop corn we will have to carry into the next crop year. If bigger than expected, the commercials will do their best to force a carrying charge...meaning wider July under Dec. I walked away from the trade because I had profit and wanted to see the stocks in all positions report. If we take this corn market high enough to shut off some demand this year, we will have a larger end of crop year carry out..however, if the cattle inventory shows stable numbers & if the pig crop report is not a shocker & broiler egg sets continue strong...old crop demand will be in place...but, at this moment, I definitely favor buying Dec & selling July but have not decided on a point of entry. We are not going to run out of corn this year and there will be a carrying charge and there will continue to be concern about acreage for another couple of months.
There was a story circulating yesterday that producers in some areas could not book anhydrous translating to higher fertilizer use and greater corn acreage. I had not heard that from any reliable source, doubt it; the problem the past few days and into January 1, floor traders are not busy, talk too much and when you try to run down the source of a story it is usually unfounded. | |
|
corn spread?
