Corn, Soybeans, and Gas Oil are at or very near their highest carry yield for the past 52 weeks
Spread Edge Capital specializes in seasonal spread trading across a wide variety of commodity markets. A spread trade is the simultaneous purchase and sale of the same commodity with different delivery dates. SpreadEdge publishes a weekly Newsletter that provides several seasonal spread trade opportunities every week.
Overview
Each week the SpreadEdge Newsletter documents an extensive list of seasonal, technical and fundamental indicators for the various commodity markets. This article will focus on % carry yield for Grains and Energy and dive deeper into Corn, Soybeans, and Gas Oil.
% Carry Yield
Futures calendar curves vary in shape over time. Some often invert, with front-month contract prices exceeding those of later contracts, resulting in positive carry. Conversely, some curves exhibit contango, leading to a negative carry. % carry yield is the one year calendar curve yield as a percentage of contract notional value. Markets tend to reverse when they get at or near their highest or lowest levels over the past 52 weeks.
- Corn continues to be at its highest carry yield for the past 52 weeks. Soybeans is very near its highest level.
- Gas Oil is at its highest level since tracking began in May 2023.
Technical Analysis
- Corn broke through the downward trendline in early November and has been grinding higher ever since. Note that while Corn has broken out, there is a disconnect between the current market price and the greatly elevated carry yield.
- Gas Oil, like several most other Energy markets, has recently broken out from the wedge formation. So far this week the candle appears bearish so a retest of the break out seems likely.
More Information
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The SpreadEdge Weekly Newsletter is published every weekend and provides a broad overview of the important seasonal, technical, and fundamental indicators within the Energy, Grains, Meats, Softs, Metals and Currency markets. In addition, spread trade recommendations and follow-up on open trades is also provided. For a free copy of the Weekly Newsletter, please send an email to info@SpreadEdgeCapital.com
Darren Carlat
SpreadEdge Capital, LLC
(214) 636-3133
Darren@SpreadEdgeCapital.com
Disclaimer
SpreadEdge Capital, LLC is registered as a Commodity Trading Advisor with the Commodity Futures Trading Commission and is an NFA member. Past performance is not indicative of future results. Futures trading is not suitable for all investors, The risk associated with futures trading is substantial. Only risk capital should be used for these investments because you can lose more than your original investment. This is not a solicitation.