grain spreaders

TraderTX

Friday's numbers will indeed be interesting from a spread point of view. Curious to see how problems in old-crop stox numbers in beans are resolved. Q-X inverse/backwardation has weakened, but continues to indicate tighter stox than implied in June 30 report. X-F neutral at about 50% of full commercial carry as questions over beginning stox lingers.
 
Quote from traderTX:

hold on a bit...you'll probably get a second chance tomorrow...we have the big bean numbers come out on friday...that should help set the tone on these final old/new spreads.
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Thanks TraderTX -- I've been out of the market most of the week.
 
Quote from youngtrader:

anybody have a fucking clue as to why the hell new crop spreads are up huge on the day????

I just dont understand how there can be no deliveries against july when ending stocks are huge and its a picture perfect crop on the way. All corn spreads should be going off the board at like 80% full carry imo.
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Yeah still trying to figure this one out and why 100000 are trading in the front spread now after the NU was basically locked for a while.

Only thing I can guess it that people don't think the current crop will be harvested by sept delievery.... total guess. Anyone else.
 
Quote from Darin Newsom:

Youngtrader, that is an excellent question. We have to consider a couple of different things. 1) As you noted, July corn is in delivery though no contracts have been delivered. This can, and often does, lead to some peculiar behavior in the spreads. 2) Export SALES are strong. Last week's report showed total sales of 1.741 bb of a projected 1.75 bb. This means that there is some short-term commercial demand in this market that is helping to support the spot-month July.
The weakening carry in the new-crop spreads is fascinating as well, for as you said, carryover stocks are not going to be a problem, and neither is expected production at this point. But, the weakening carry (roughly 65 percent to 70 percent of full commercial carry) in the new-crop Dec/Mar, Mar/May, and May/July spreads would indicate the sharp selloff seen in the market over the last four weeks is starting to generate some commercial buying interest.
However, the longer-term picture is not bullish. I posted a blog item this morning looking at the corn continuous monthly chart and its bearish signals. It will be interesting to see what develops.
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Right long term bearish stuff should take spreads out to full carry. I heard traders don't believe that the crop will be ok... of course no one believes that silly usda corn number but yields/acr could be all time highs even if all those acres materialize, (which they won't). I think final production will still be there. Looking for curve to steepen. Seems like a lot of people don't agree... who knows maybe the crop will suck. I know people are frost scared as well and think last year was total luck to not get an early frost.
 
It was due to short term cash tightness. Flat price dropped, farmers stopped selling while end users saw it as a chance to cover their needs. So caught a lot of guys (including myself) bearspread in the u/z and short hedgers were caught in july.

Crop is picture perfect, ending stocks are plentiful, plenty of acres in the new crop. in my opinion that n/u squeeze was a one time event. Theres too many smart guys on the cash side of the business that would take major advantage of the situation if u/z did the same thing as n/u.
 
I've been looking at the various bean calendar spreads mostly. But I trade across various markets and don't always understand ag that well (yet more to learn). Anything catching your eye as far as action? Think Q/X can go south of 70 in the beans?
 
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