December Wheat / Corn Spread Study


Continuing from yesterday’s post, today we’ll look at the CBOT wheat / CBOT corn spread. Right now, the December corn contract is trading near a $2.00 discount to wheat. If you think corn will appreciate faster than wheat and invert like the May (K) contracts have, you can go long corn and sell wheat against it.

Trading rule / warning: trade only 1 spread if your normal contract position size is 1 contract. Don’t over-leverage your account because you see the potential for $10,000 potential profit per spread by December or because you’re afforded lower spreader margin. That can become deadly very fast and you can lose money on both legs – both can go against you.

You trade this at your own risk and this is not a trading recommendation.


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