Grain Basket: Roll to the Summer Spreads

Stay Short

The IMC blog entered a short position in the May Grain Basket spread (the difference between the price of one May soybean contract and the sum of one May wheat contract and one May corn contract) at +$2.16 (premium beans) on February 13th.

With the upcoming First Notice Day for the May grain contracts, we are going to roll to the July contracts.

July Grain Basket spread daily

July Grain Basket spread daily

After cracking support at the rising 100-day Moving Average in February, the Grain Basket slumped to multi-month lows.  It has rebounded over the last couple of weeks, but the now declining 100-day MA should provide technical resistance and cap the rally.

The April 11th multi-month low of $1.29 1/2 sets near-term price support.  A break below this price should clear the way for a collision with the psychological one dollar mark.  If the July Grain Basket does hit a new low for 2017 the blog will be watching closely to see if a setup materializes that would allow for an additional ‘add-on’ short sale to take advantage of the continued descent.

Trade Strategy:

Exit the short May soybean contract, long May wheat contract, and long May corn contract and simultaneously sell  short a short July soybean contract, buy a July wheat contract, and buy a July corn contract at the market-on-close on Tuesday, April 25th.  Risk the July grain basket spread to a two-day close above +$2.80. 

 

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Minneapolis/Kansas City Wheat Spread: Reset For the July Spread

Waiting for a Reversal

The IMC blog is holding a short position in the May Minneapolis/Kansas City wheat spread that was entered at +97 cents on February 10th.

The spread has rebounded sharply over the last two weeks and is testing the contract highs.  Therefore, we are going to liquidate the May spread and set parameters to short the July spread if it backs off.

July Minneapolis Kansas City Wheat spread daily

July Minneapolis Kansas City Wheat spread daily

We’ve established before that the Minneapolis hard red spring wheat is currently too pricey in comparison to the Kansas City hard red winter wheat.  It’s been this way for months, though.  While we still intend to be short, a breakout to new contract highs could keep it running indefinitely.  Hence, the strategy of waiting for the July spread to start back down before getting short again.

Trade Strategy:

Exit the hypothetical short position in the May Minneapolis/Kansas City wheat spread at the market-on-close on Tuesday, April 25th. 

Place a new order sell one July Minneapolis wheat contract and simultaneously buy one July Kansas City wheat contract if the spread closes below +$1.10.  If filled, risk a two-day close of three cents above the spread contract high that precedes the entry (currently at +$1.20 cents). 

Feeder/Corn Spread: Roll To Aug and Sep Contracts

Near-Term Price “Cattle-yst” At Hand?!

The IMC blog has been holding a short position in the feeder/corn (x4) spread since September 6th.  Due to rollovers, the blog is currently short the April-May spread from the equivalent of -$9,912.50 (premium corn).

April-May Feeders Corn (x4) spread daily

April-May Feeders Corn (x4) spread daily

The spread is currently a stone’s throw from the contract high.  We’re hoping for a double top.  If it blasts thru to new contract highs, however, it would be prudent to take our lumps and get out.

Today we are going to roll out to the August-September spread.  Neither the April-May spread nor the Aug-Sep spread has ever closed with the value of the feeder contract at a premium over corn.  If that happens, it will be our signal to exit stage right.

Feeders Corn (x4) spread weekly

Feeders Corn (x4) spread weekly

A breakout above the even money level could allow this spread to race toward last summer’s high of +$10,087.50 (premium feeders).  If the run doesn’t stop there, who’s to say it can’t double the premium and reach +$20k?!

Also, the feeder/corn ratio is currently sitting just below 4:1.  A breakout above even money for the spread would mean that the feeder/corn ratio has exceeded 4:1.  If that occurs, the odds increase that the ratio will head for the next handle at 5:1.

Feeders Corn ratio weekly

Feeders Corn ratio weekly

Heck, it could even go higher than that.  If that happens, we will adjust the ratio of the spread to get closer to dollar neutral and look for a setup to get short on a reversal.  As you can see on the forty-year weekly chart, a ratio of 5:1 or higher does not come around very often.

Trade Strategy:

Buy back the short 50,000 lb. April feeder cattle contract and simultaneously sell short an August feeder cattle contract at the market-on-close on Tuesday, April 25th.  Also, sell the four 5,000 bushel May corn contracts and simultaneously buy four 5,000 bushel September corn contracts at the market-on-close on Tuesday, April 25th.  Risk the Aug-Sep feeder/corn (x4) spread to a two-day close above even money.

 

Feeder/Corn Spread: Time to Rollover

Staying the Course

The IMC blog is holding a short position in the March feeder/corn (x4) spread from the equivalent of -$8,487.50 (premium corn).  We’ve been in this position since September 6th and patiently rolling over.  It’s time to do it again.

The spread will be rolled to the April and May contracts.  Based on the current prices, this will end up readjusting our equivalent entry level to somewhere around -$9,700 (premium corn).

feeders-corn-x4-spread-weekly

Feeders Corn (x4) spread weekly

So is it worthwhile to stay short?  We think so.  As you can see on the weekly timeframe, near-term support is located at last year’s low of -$18,837.50 (premium corn).  A clean break below this level could clear the way for a decline to the 2012 high of -$31,612.50.  Remember the technical charting rule: Old price resistance, once it has been broken, becomes new price support.

Trade Strategy:

Buy back the short 50,000 lb. March feeder cattle contract and simultaneously sell short an April feeder cattle contract at the market-on-close on Friday, February 24th.  Also, sell the four 5,000 bushel March corn contracts and simultaneously buy four 5,000 bushel May corn contracts at the market-on-close on Friday, February 24th.  Risk the April-May feeder/corn (x4) spread to a two-day close above even money.

 

Sugar/Corn Spread: Strap In For the Next Bear Market

Early Stage Bear Market

The spread between sugar and corn may have ended a four-year bull market right when Q4 started last year.  If so, historical precedent suggests that it could now be at the very start of a multi-year decline.  That means there should be plenty of opportunity, both in terms of time and price, to take advantage of it.  Spread traders would be wise to start paying attention to this one.

To even consider a potential spread trade, though, the IMC blog first likes to establish that the markets in question have historically exhibited a strong correlation.  It can’t be just a short-term fluke.

In the past, there have been strange anomaly periods where markets with no fundamental relationship (like soybeans and silver, for example) were somehow highly-correlated for a few months.  But that certainly doesn’t mean that it’s got the makings of a good spread trade candidate.

There have also been market crisis situations where markets that are normally unrelated all go to a correlation of one.  Remember the crash of ’87 or the Great Financial Crisis of ’08?  The temporary strong correlation of all markets was the product of a liquidity crisis and dissipated once the crisis has passed.

Therefore, we want to see decades of price history where a couple of markets have shown correlation.

Cousins, Not Twins

Go back the last thirty-five years on a weekly closing-basis, and you will see that the prices of sugar and corn are pretty correlated.  This is likely due to the fact that both markets are used as derivatives to produce ethanol.  Also, sugar and corn syrup are both used as sweeteners in food products.

Now, you’ll also notice that the correlation would strengthen and weaken.  This ebb and flow of correlation is because the crops have some different uses, different main production areas, and several other fundamental differences that can impact one crop without directly impacting the other.  So they may not look exactly like identical twins when you compare the charts, but they at least look related enough to be first cousins!

sugar-corn-overlay-nearest-futures-weekly

Sugar Corn overlay (nearest-futures) weekly

Despite the inconsistency in the correlation periods –heck, maybe even because of it- the spread between sugar and corn has offered some great trading opportunities.  This often was the case after one market had outperformed the other for a prolonged period of time or when there was a temporary disconnect where one market was trending while the other was static or even trending in the opposite direction.  Eventually, this divergence would end and a major price reversal in the spread would occur.

Historical Price Boundaries

A sugar futures contract controls 112,000 pounds of sugar and a corn futures contract controls 5,000 bushels of corn.  So the blog converts the contracts to their market value before plotting a spread in order to simplify and clarify things.

About four months ago, the nearest-futures sugar contract was worth almost +$9,300 more a nearest-futures corn contract.  Not only was this significant by being the highest premium in over six and a half years, but it was also only the fourth time in the last four decades that a sugar contract has ever reached a premium of +$9k or more over a corn contract.  The prior three occurrences were followed my multi-year bear markets.  Therefore, it would not be surprising if a major decline was on the horizon.

sugar-corn-spread-nearest-futures-weeklyFor how long?  And, more importantly, how big?!

Consider the prior three bear markets that started above the +$9k mark:

The bear market that started from the October 1980 top lasted three years and nine months.  The decline from top to bottom was approximately $44,300.

The bear market that started from the January 2006 top lasted two years and six months.  The decline from top to bottom was approximately $35,300.

The bear market that started from the January 2010 top lasted two years and seven months.  The decline from top to bottom was approximately $33,800.

The sugar/corn spread seems to act like a pendulum.  After reaching an extreme on the high side, the bear markets that followed these three peaks crushed the spread to levels rarely seen on the downside.  You can see that there have only been a few instances where the sugar contract value traded at a discount of -$12k or more to the value of a corn contract.  Down at those levels, the spread always turned out to be a great buying opportunity again!

This price history certainly does not guarantee that the sugar/corn spread will drop tens of thousands of dollars over the next two or three years.  But it does show us what occurred before, which tells us the potential and the probabilities of what could occur.

The Ratio Test

As always, we like to look at the ratio between the markets as well.  This helps normalize the prices.  It’s a filter that tells us if the market relationship really is truly at an extreme level by historical standards.

In early October the nearest-futures sugar/corn ratio peaked at 1.54:1.  So the value of a sugar contract was worth 54% more than the value of a corn contract.  Looking at the weekly price data of the last forty years, this was only the fifth bull market that pushed the ratio to 1.5:1 or higher.  Therefore, the ratio confirms what the spread is telling us: Sugar is just way to expensive in comparison to corn.

sugar-corn-ratio-nearest-futures-weekly

Sugar Corn ratio (nearest-futures) weekly

On the other side of the coin, sugar is historically too cheap in comparison to corn when the ratio drops to 0.5:1 or lower.  At that point, one sugar contract is worth only half as much as a corn contract.  That hasn’t happened since the financial crisis.

The Price Action

Over the last two and a half years, the 150-day Moving Average has been a reliable trend indicator for the nearest-futures sugar/corn spread.  When the spread closed below the 150-day MA at the end of November 2014 it continued its descent until August of 2015.

After a failed breakout above the 150-day MA in the first part of September 2015, the spread made a second attempt at the end of the month and was successful.  This launched a runaway move that lasted for about a year.

sugar-corn-spread-nearest-futures-daily

Sugar Corn spread (nearest-futures) daily

Now, I do want to point out that two failed bearish trend change signals occurred in February and April of 2016.  However, both signals were reversed within a couple of days.

Two months ago, the nearest-futures sugar/corn spread made a clean break below the 150-day MA.  It has stayed below it the whole time since.  Therefore, a trend follower would have to consider the spread to be in a bearish trend at the moment.

Zeroing In

On the nearest-futures chart, the sugar/corn spread rallied off the December low and has been stuck in consolidation mode for the last month.  The spread scraped against resistance at the 150-day MA.  If it starts to roll over here, a second leg down could commence.

Looking at the May sugar/corn spread specifically, we can speed things up a bit and measure the trend according to the 50-day Moving Average.  When this spread cracked the 50-day MA in October it signaled a bearish trend change.  The spread then closed back above the 50-day MA again once the New Year began and turned bullish.

Interestingly, the uptrend did not continue after the January trend change signal.  The May sugar/corn spread has been stuck in a sideways trading range.  A break below the January low and close back under the 50-day MA would put the ball back in the bear’s court.

may-sugar-corn-spread-daily

May Sugar Corn spread daily

Let’s put this all in context.  The fact that the nearest-futures spread peaked last year at levels that have previously led to major bear markets…

The fact that the sugar/corn ratio also reached historic extremes that have always been unsustainable…

The fact that the spread is still in a downtrend on the nearest-futures chart by virtue of the fact that it remains below the 150-day MA…

One would have to think that selling the May sugar/corn spread on a close below the 50-day MA would be a trade worth taking!

Trade Strategy:

Place a hypothetical contingency order to sell one 112,000 lb. May sugar contract and simultaneously buy one 5,000 bushel May corn contract if the spread closes below the 50-day MA (currently around +$3,666).  If filled, liquidate the position on a two-consecutive day close $500 above the 2017 high that precedes the entry (currently at +$4,923.90). 

Grain Basket Spread: Is the Bear Coming Out of Hibernation?

The Grain Basket Spread

I’ve traded the spread between soybeans and the sum of wheat and corn for many years and I’ve also posted about it on this blog a few times.  I nicknamed this spread the grain basket.  And sometimes it has been known to make baskets of money!  Based on current conditions, it appears that the grain basket spread may be shaping up for a new trading opportunity.

Price Correlation

Historically, the price relationship between soybeans, wheat, and corn has mostly been a highly-correlated affair.  Notice the word “mostly.”  There have been times when the correlation seemed to weaken.

For instance, we’ve seen a drought in Russia scorch the wheat crops and send wheat prices rocketing while it had no effect on world prices of beans and corn.  There have also been major hits to the South American bean crop that sent US soybeans to the moon, while corn was up modestly and wheat did nothing.

soybeans-wheat-corn-overlay-nearest-futures-monthly

Soybeans Wheat Corn overlay (nearest-futures) monthly

These divergent moves produced a drop in correlation, but they have always proved to be temporary events.  Over the long haul, the three grains have always gotten back in sync.  That’s what makes them such an attractive candidate for spread trades.

Historical Boundaries

As readers know, the IMC blog only takes an interest in the spreads that are at historical extremes.  Due to the mean-reverting nature of commodities, we believe that a spread trading at an historical extreme has a high-probability of making a sizable reversal and is worth betting on.  The trick, of course, is timing that reversal.

So what constitutes as an historical extreme?  Good question.  Here’s my way of looking at it.

Initially, a spread that has moved more than two standard deviations from the mean is a good candidate.  Remember, roughly 95% of all data values in a data distribution fall within two standard deviations from the mean.  So once a spread gets past the two standard deviation signpost, it’s stretched pretty thin.

Now, if you want to break it down into even simpler terms and shoot for a less technical answer, how about this: a spread is considered to be trading at an historical extreme when it reaches a price level that has only been reached infrequently (if ever) and has never been a sustainable level.

Using the grain basket spread as our example, take a look at nearly half a century of monthly price history.  Notice that there have only been a total of six bull markets that ran the spread up to three dollars or higher (premium beans).  Also, the longest consecutive run of month-end closes at three dollars or higher was four months.  Therefore, we can consider the spread to be “expensive” and at an historical extreme when beans command a premium of $3-per-bushel over the sum of wheat and corn.

grain-basket-spread-nearest-futures-monthly

Grain Basket spread (nearest-futures) monthly

Conversely, we can consider the grain basket spread to be “dirt cheap” and at an historical extreme when the sum of wheat and corn gain the upper hand and trade at a premium of two dollars or more over the price of soybeans.  Only three bear markets in the last fifty years have brought the spread to levels that low!

Grain Expectations

First off, let’s establish this basic and very important fact: It is absolutely impossible to know with certainly what the future will be.  Otherwise, palm readers and tarot card shops would not be located on the sketchy side of town.  And people who use Ouija boards and Magic 8 Balls would have their own yachts.

But what we can know is what the outcome probabilities are for future events.

There is a very important difference here.

That being said, notice that all six of the bull markets that ran the grain basket spread to three dollars or higher (premium beans) were followed by bear markets that erased the entire premium from the beans.

Therefore, a trader who gets positioned on the short side of the grain basket spread after a reversal signal occurs at $3-per-bushel or higher should be targeting a return to ‘even money’ or lower.  This will help you assess the reward-to-risk ratio on your trade setups and pyramid positions.

The Improbable Still Happens

Although I just picked on the fortune tellers for trying to divine the future, it does not mean that people like us who focus on the probabilities are completely off the hook.  Some people tend to forget that probabilities are not guarantees.  The improbable still happens!  And sometimes more often than we’d like to think.

Consider the Chicago Cubs winning the World Series last year or the Patriots coming back to win the Super Bowl in overtime last night…

Or the Brexit vote last summer or Trump’s election victory three months ago!

This is why you have to learn to bet according to the probabilities to become a good trader, but then you have to learn to manage risk according to the possibilities to become a great trader.

Current Outlook

The May grain basket spread (the difference between the price of one May soybean contract and the sum of one May wheat contract and one May corn contract) broke out of a multi-month trading range at the end of 2015 and has been trending higher since then.

During this bull run, the spread stayed above technical support at the rising 100-day Moving Average…until a month ago when it made a two-day close below the 100-day MA for the first time in over a year.

may-grain-basket-spread-dailyThe spread quickly rebounded and recovered nearly three-quarters of the pullback from the December peak.  However, prices softened over the last couple of weeks and the 100-day MA is being tested once again.

If the mid-January bounce turns out to be a secondary (lower) high and the May grain basket spread closes back under the 100-day MA, it may be time to start betting that the bull market is over.

Trade Strategy:

For tracking purposes, the blog will make a hypothetical trade by selling one 5,000 bushel May soybean contract and simultaneously buying one 5,000 bushel May wheat contract and buying one 5,000 bushel May corn contract if the spread between soybeans and the sum of the wheat and corn closes below the rising 100-day Moving Average (currently at +$2.22 1/4).  If filled, risk a two-day close of 5 cents above the contract high that precedes the entry. 

Minneapolis/KC Wheat Spread: Trade Parameter Revision

Making a Play For May

The IMC blog has been working an order to short the March Minneapolis/Kansas City wheat spread.  Since the March grain contracts will have their First Notice Day in just another three weeks, however, it may be a prudent time to shift our focus over to the May spread.

may-minneapolis-kansas-city-wheat-spread-daily

May Minneapolis Kansas City wheat spread daily

Over the past year, the May spread has made several pullbacks during the overall run higher.  Each pullback bottomed out above the rising 100-day Moving Average.  Therefore, we are going to keep things simple and use a close below the 100-day MA as a green light to go short.

Trade Strategy:

Cancel the hypothetical order to short the March Minneapolis/Kansas City wheat spread.  Place a new order sell one May Minneapolis wheat contract and simultaneously buy one May Kansas City wheat contract if the spread closes below the rising 100-day MA (currently at +96 1/2 cents).  If filled, risk a two-day close of three cents above the spread contract high that precedes the entry (currently at +$1.25 3/4 cents). 

Minneapolis/KC Wheat Spread: Use the Ratio for Timing the Entry

Spring Forward

Just a week ago, it was time for us to ‘fall back’ here in the US.  And now we’re less than two weeks out from Thanksgiving!  This brings the Christmas delivery contracts right into view.

Since the futures markets are pricing in the future, we think it’s now time to move our recommendation for a December spread trade into the future as well.  Always good to stay a step ahead of the crowd.

The blog is currently working an order to short the December Minneapolis/Kansas City wheat spread.  We are simply going to move the recommendation over to the March 2017 spread now.

march-minneapolis-kansas-city-wheat-ratio-daily

March Minneapolis Kansas City Wheat ratio daily

The entry parameters for this trade are going to be tweaked slightly.  Initially, we were going to short the December spread once it cracked support at the rising 75-day Moving Average.  The December spread has not done this yet, but the March spread already did this and recovered.  So that’s a failure.

However, the March Minneapolis/Kansas City wheat ratio has held above the 75-day MA this entire time.  It’s been eight months since the ratio last closed below the 75-day MA.  Therefore, we are going to wait for the ratio to break support before initiating a short position in the March Minneapolis/Kansas City wheat spread.

Trade Strategy:

Cancel the hypothetical order to short the December Minneapolis/Kansas City wheat spread.  Place a new order sell one March Minneapolis wheat contract and simultaneously buy one March Kansas City wheat contract if the ratio between the two contracts closes below the rising 75-day MA (currently near 1.19:1).  If filled, risk a two-day close of three cents above the spread contract high that precedes the entry (currently at +$1.07 1/4 cents). 

Feeder/Corn Spread: Roll to 2017 Contracts

Time to Switch

The IMC blog entered a short position in the Nov-Dec feeder/corn (x4) spread at -$2,662.50 (premium corn) on September 6th.  The November feeder contract is about to expire and the First Notice Day for the December corn contract is just a couple of weeks out, so we’re going to roll to the March 2017 contracts right now.

The March feeder/corn (x4) spread made a double top formation back in August and fell to a four-month low by mid-October.  The current three-week rally has now brought it into a technical resistance area at the Fibonacci .382 retracement of the entire decline and the declining 50-day Moving Average.  If you aren’t already short or you’re looking to add to the position, this would be a good place to do it!

march-feeder-corn-x4-spread-daily

March Feeder Corn (x4) spread daily

Don’t forget that we’re looking for the spread to ultimately descend to the -$40k area at a minimum.  This is not a guarantee, of course, but it’s based on decades of price history.  This gives us favorable probabilities.  Therefore, we will be watching closely to see if a low-risk setup materializes to allow us to pyramid the position.

Trade Strategy:

Buy back the short 50,000 lb. November feeder cattle contract and simultaneously sell short a March feeder cattle contract.  Also, sell the four 5,000 bushel December corn contracts and simultaneously buy four 5,000 bushel March corn contracts.  Risk the March feeder/corn (x4) spread to a two-day close above even money.

Soy Meal/Bean Oil Spread: Time to Cover the Shorts

Ready To Pull the Trigger

Back in the late spring, the ratio between the value of one 100-ton soy meal futures contract and the value of one 60,000 lb. bean oil contract reached 2:1.  Since the ratio has only been at 2:1 or higher a handful of times in the last forty-five years, we knew that a short sale opportunity was in the making.

We initiated a short position on July 7th in the soy meal/bean oil (x2) spread when the spread closed below the rising 30-day Moving Average for the first time in three months, triggering a bearish trend change signal.

Due to the rapid descent, we were able to quickly pyramid the positions by adding spreads four more times.

Initially, we started the position in the September futures contracts.  Then we rolled to the current December contracts.  Taking into account the carry charge, the short December soy meal/bean oil (x2) spread positions were entered at the equivalent of -$432 (premium bean oil), the equivalent of -$4,318, the equivalent of -$6,824, the equivalent of -$8,900, and -$11,196.

The average entry price on the five short sale price points is -$6,334.

The Soy Meal Market

December soy meal appears to have started a move higher today.  There are three technical signals for this.

First, it rocketed to the highest price in over two months.  This is a Turtle-style or Donchian Band breakout signal that could attract classic trend followers.

Second, the market is set to make a two-day close above the declining 50-day MA for the first time since the first half of July.  This would be a bullish trend change signal.  The last time this occurred was in mid-March and trading it would have put you long right before the huge run into June occurred.

december-soy-meal-daily

December Soy Meal daily

Third, December soy meal is poised to close well-above the 200-day MA for the first time since late August.  Many macro traders use the 200-day MA to determine a market’s trend.

This is all backed up by the seasonal pattern that shows that meal usually establishes a major bottom in October.  Looks like it’s right on time this year!

The Bean Oil Market

While meal is just starting to turn bullish, the bean oil market has been in an uptrend for quite some time.  First, it bottomed in late July.  Then in early August, it made a two-day close above the declining 50-day MA for the first time in nearly three and a half months.  The market did close back under the 50-day MA in mid-September, but it turned around two days later and the uptrend resumed.

december-bean-oil-daily

December Bean Oil daily

This week the market ran into a potential problem.  On Monday the December bean oil cleared price resistance at the April 21st contract high of 35.81.  But after a one-day close above this high, the contract dipped back under it and sank to a four-day low today.  This failed breakout attempt triggered a Wash & Rinse sell signal.

bean-oil-nearest-futures-weekly

Bean Oil (nearest-futures) weekly

Furthermore, bean oil hit major technical headwinds on the weekly timeframe.  The market entered a resistance zone between the 2015 nearest-futures high of 35.29 and the 2010 nearest-futures low of 35.75 (old price support, once it has been broken, become new price resistance).  It is also nearing the declining weekly 200-bar MA at 36.51.  A close back under the 2015 high of 35.29 and the April 2016 nearest-futures high of 35.14 would trigger a Wash & Rinse sell signal on the weekly timeframe as well.

The Spread Situation

With soy meal just starting a potential run to the upside…

And bean oil potentially topping…

The soy meal/bean oil (x2) spread is vulnerable to a sizable reversal to the upside.

december-2016-soy-meal-bean-oil-x2-spread-daily

December 2016 Soy Meal Bean Oil (x2) spread daily

Recall that we set the intervals for the ‘add-on’ entry and exit levels at $2k.  This was based on the spreads volatility.  Currently, the December spread has rallied as much as $2,746 off Monday’s low.  This ‘overbalancing of price’ could be an indication that the trend in the spread is changing.

A two-day close above the declining 30-day MA for the first time since the first week of July would confirm it.  In light of this, we want to go ahead and exit stage right!

Trade Strategy:

On the five short December soy meal/bean oil (x2) spreads entered at the equivalent of -$432 (premium bean oil), the equivalent of -$4,318, the equivalent of -$6,824, the equivalent of -$8,900, and -$11,196, exit at -$9,712 or better.