bean spreads

L

local

Forget the corn spreads for now, let's talk about the bean spreads. Overnite the nov10/nov11 traded to its highest level thus far, about 41 over. The July11/nov11 traded to its highest level so far as well, about 65 over. I have been trading the x/x from the long side and now I'm getting really bulled up. Now that supply is fixed at least until the SA crop comes off, it looks like demand is underestimated (again) and we are faced with a scenario similiar to two years ago. Exports were at high end of expectations depite buck and half rally. Tell you something ? Chinese will keep buying, need to move higher to ration supply ?
Just buy the spreads.

Regards, local
 
Quote from local:

Doesn't anyone trade bean spreads ? gaining 5 on the day, corn spreads down.

Regards, local
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not right now. focusing on my cattles and corn spread
 
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This is the current beans/corn ratio. Beans are certainly looking rather ‘cheap’ relative to corn. This trend is established in corn’s favor, so one shall try to pick a
bottom here. However, the time to own beans ‘at the expense’ of corn may be coming… perhaps this winter, this spring, we shall see.
 
I know the trade traditionally uses a ratio of 2.5 as a measuring stick, but doesn't that change as corn and bean prices approach what may be considered historically high price levels ?

Regards, local
 
Read this morning where some analysts are forecasting a carryout for beans for 2011/12 of 0 to 50 million bushels. That is unheard of.
Looked at nov11/nov12 bean spread and it traded between 45 and 56 over. That is unheard of. Appears to me that the spreads moving forward are forecasting very tight supplies.

regards, local
 
You're right about the tight forecasting local. It seems to me though that that is just extrapolating from this year's obviously tight stocks and building in some uncertainty regarding the SA crop. Beans have felt the strongest this week, fighting for acreage I assume. I wish more Eters spent time on these relationships and less playing the Emini casino...
 
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