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If you trade this trade, keep in mind that this is a bear spread (shot near/long far) in a bullish moving market. I was short the Feb/Apr spread. It was following the seasonal quite nicely until the direction of the outright market, which asserts more influence on the spread over time (as the front month becomes near active), pushed the spread in a counter seasonal manner. In addition, unlike contango markets, where the cash-and-carry trade keeps the spread in check (to some degree), fighting a backwardated market can be a tough. Learning from the Z/G and G/J spreads, I would look to take profits quickly. Checkout this chart of the Feb/Apr spread where I sold in accordance with the seasonal (didn’t quite work out):
Yes, it is a bear spread. Although in the meats contracts move more individually than in many other commodities.
I do not know when you entered the LCJ-LCG. But one difference might be that I entered the LCM-LCG spread close to the lowest value it had in the most recent 15 years. The other difference might be that the spread worked very reliably for my entry date.
But of course - the spread might move further downwards. I will not be very patient, and use a close stop. I also already placed limit orders to take profit at various levels.
Just read that these reports will be released at 11 am (Chicago Time) or 18.00 (Central European Time). Whereas usually the release is after the close, this time trading will be open for 1 1/4 more hours.
Obviously the CME wants to avoid a release of these reports after the close, as the next trading day will show very low volume due to Chrimas.
I am still holding the KWH-WH spread. Nothing regarding the fundamentals has changed significantly. The spread receives support from seasonals at least until end of January
January 12th the next important USDA report on grains and beans will be published. The January report is well known for surprizes.
I like the CK-WK at this time of the year. According to MRCI data, the trade should work until end of February.
A problem is that this spread already has run quite far. Not often did this spread move significantly below 50. But there are several examples in recent years (2011, 2012, 2013).