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Analyst Elaine Kub notes HRW wheat cash bids look underpriced against CBOT futures while HRS futures on MGEX look overpriced versus the benchmark. She argues the unusual spreads reflect fundamentals, so arbitrage trades need caution.
KC futures and CBOT futures were both trading near $3.90 a bushel.
Wide and persistent spreads between HRW, SRW and HRS reflect real supply and quality differences, so buyers should price wheat classes on fundamentals rather than assume convergence.
dtnpf.comElaine KubDec 7, 2016Not enough comparable past events yet for a historical read.
Not enough comparable past events yet for a historical read.
Moves of each commodity's benchmark from the last close before the event. Historical reads pool past events of the same kind; they describe what happened, not what will. Not investment advice.
