The intra-market seasonal spread I bought on corn two weeks ago has been showing a positive outlook.
| 2013 Dec Corn | 2014 July Corn | Spread | |
| Oct 7, 2012 | Buy @ $6.2475 | Short @ $6.4125 | -$0.165 |
| Oct 26, 2012 | $6.3525 | $6.5050 | $0.1525 |
| Gain (Loss) | ($6.3525-$6.2475)*5000=$525 | ($6.4125-$6.5050)*5000= -$462.50 | ($0.165-$0.1525)*5000=$62.50 |
I am not offsetting the spread but I am going to buy more contracts of this to leverage on the seasonal changes in the corn market.
In addition, as mentioned in my last week’s post, this week’s corn prices worked sideways. However, the highlight of the week was when US export sales went down. The actual US corn export is 140,300 metric tons whereas traders were foreseeing that the volume is between 150,000 and 250,000 metric tons. Hence, there was a downward pressure on the corn price due to decreased demand. This is in accordance to the fact that the corn supply this harvest is record low; therefore, demand has to shrunk somewhere.
http://www.agweb.com/article/end_users_skimp_as_corn_supply_is_divided_up/
http://www.agweb.com/article/strong_long-term_outlook_for_prices/