Posted by: usset001 | April 27, 2011

Interdelivery soybean spreads

Jul'11 soybeans

I continue my look at interdelivery spreads, and what they tell us about the cureent bullish or bearish tone in the market. Let’s talk soybeans.

The July contract has generally trended sideways for most of this year. The trading range has been wide – about $2/bu. – but we would be hard press to declare bull or bear a winner over the past 4 months.

The Jul’11/Nov’11 (old crop/new crop) spread is telling a different story.

Jul'11/Nov'11 soybean spread

The inverse of July over the November contract has been on one long, steady decline since the first of the year. In my opinion, this trend does not bode well for soybean bulls. A bull market with staying power must show me tightening spreads, and not an old crop/new crop inverse that has declined $1/bu. in four months.

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