Wheat / Corn Spread

The drop in grain prices has been steady and significant. There will be an area of value where prices support but choosing the exact price in time is difficult. We believe one way to approach “picking a bottom” is to use inter-market spreads. For example, the Wheat vs. Corn. There appears to be some chart support at these lower prices and we believe the price relationship could rebound as much as twenty to thirty cents from current levels. A spread trade is created by simultaneously buying Dec. Wheat and selling Dec. Corn. A correction in the price to a greater difference (from the 73-75 cent range) towards 90 -95 is the goal.

For additional information and risk parameters please contact Mitch LaRocca @ 972-387-0080 or mitch@dallascommodity.com

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