This is what I've been talking about

[blackpowder]

great topic. what aville is for.
on a lighter note. i told my banker to hold her breath
until march next year.

[bucket]

Did they get her to the hospital in time??? She should have stroked out on that comment!

[mcdon]

There should be an equilibrium point with respect
to the amount of carry in a spread, too much and it
discourages a long position that is rolled forward,
e.g. when VSR was introduced it served to push
spreads to excessive levels, I remember buying the
U/Z spread at 50 cents. extrapolate that over the
course of a year and that is $2.00. For a fund
carrying rolling a long position, it makes it almost
impossible to realize a profit. Extrapolate it over the
course of 5 years and the long owns$17 wheat. This
was the death knell for Duetche Bank. On the flip
side, this is where the strategy of capturing the
carry in a spread works for a short position. VSR
wouldn't work for canola, no guarantee that basis
would narrow, not enough competition in market.
Expecting basis to narrow is giving grain cos. more
credit than they deserve.

[jdepape]

Average canola basis has gone from -70 in Jan to
-32 today.

Who do you give "credit" for this price increase?