Follow up on query by Minx
Deemed to be very high risk trade as spreads are at historically very high levels. I wouldn't be surprised to see this spread both much lower and much higher in next few weeks.
Succces of trade depends on whether old crop meal is going to run out later this summer (20Jul). I don't know much about the fundamentals.
Since may, the trade worked quite nicely for me. Liquidated earlier this week at what seems the recent highs (intuition? more likely pure luck). Intra-day legged the trade with SMQ @312 and SMF5 @210 for 102 which was even higher than displayed on chart. (Was long from about 55 - only tell you about the good ones )
As this trade seasonally works between May and mid-July, I think it would probably be better to speculate on the SM Q leg. Risk will probably be very similar as the spread trade as it will all depend on whether there will be shortage in the old crop. recent price action, however, doesnot seem to agree with fundamental perception of shortage. Technically my charts seem to say that is has topped. On the other hand a break of the down trend line might target 330 levels. For now SM Q4 seems to be stalling.
What do you think?
Deemed to be very high risk trade as spreads are at historically very high levels. I wouldn't be surprised to see this spread both much lower and much higher in next few weeks.
Succces of trade depends on whether old crop meal is going to run out later this summer (20Jul). I don't know much about the fundamentals.
Since may, the trade worked quite nicely for me. Liquidated earlier this week at what seems the recent highs (intuition? more likely pure luck). Intra-day legged the trade with SMQ @312 and SMF5 @210 for 102 which was even higher than displayed on chart. (Was long from about 55 - only tell you about the good ones )
As this trade seasonally works between May and mid-July, I think it would probably be better to speculate on the SM Q leg. Risk will probably be very similar as the spread trade as it will all depend on whether there will be shortage in the old crop. recent price action, however, doesnot seem to agree with fundamental perception of shortage. Technically my charts seem to say that is has topped. On the other hand a break of the down trend line might target 330 levels. For now SM Q4 seems to be stalling.
What do you think?