CWRS Basis Dec 11 ($42.61)!!!? Missing $100/t?

[crusher]

Tom,

I see a 50 cent inverse in Dec to Mar minnie wheat. Can a guy role his locked in dec futures to try and get to March and hopefully a reasonable basis? Late at night and not thinking straight.

[charliep]

I suspect the CWB will make you eat the inverse if try to roll it. If you look at
the way the FPC operates, all months are relatived to a standard contract price
(or perhaps better locked in total payments). Basis is what makes the
adjustment to relate to a specific futures contract price - backwards I know
but_____. I guess relates to the CWB philosophy of all things average.

No advice on whether to roll. Still can't forecast CWB basis although currently
on the historically wide side for December. Will it narrow? Good question. No
answer. Risk it will get wider? I suspect minimal but have been wrong many
times before.

Could wait for the December/March spread to narrow before rolling but that
may not accomplish what you want on the price side.

Not close enough to the market these days (too many other things going on)
but any explanation of the inverse in MGEX wheat? Have trouble with this fact
at the end of the North American spring wheat harvest.