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Kansas Wheat Amongst Several Grains Entering Seasonal Weakness


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Kansas Wheat in amongst several Grains that are flashing overbought conditions AND is entering a seasonally weak period. In addition, the chart below suggests that a retracement to the upward trendline is likely. The KC Wheat (H21-K21) calendar spread has profited in 13 of the last 15 years when sold on 10/29 and bought on 1/28. In addition, the outright March contract has dropped in 16 of the last 18 years over the next 15 trading days after the 10/29 close (today). This convergence of events makes for a good risk reward on a calendar spread. More aggressive traders should consider the KC Wheat (H21-N21) or even the (H21-U21) calendar spreads. I already have exposure to these further out months so I'm opting for the more conservative (H21-K21) spread.

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Darren Carlat is the Managing Director of SpreadEdge Capital, LLC and is responsible for all aspects of the company's operations including market research, trading, customer satisfaction, and operations management.

In 1986, he started a 32-year career in various increasing capacities with Frito-Lay, Inc., a large snack food producer and distributor that is a division of PepsiCo Inc.. Prior to his retirement in early 2018, Darren served as an Executive in Supply Chain Operations in the company’s headquarters in Plano, Tx.

For decades, Darren has been developing, programming, and testing a wide variety of trading systems. In 2010, he finished initial development efforts on a seasonal spread trading strategy which he has continually refined, enhanced and improved. This trading system has been used for his own trading activities and is the basis of all the programs described. In 2014, he founded SpreadEdge Capital, LLC, registered SpreadEdge Capital as a Commodity Trading Advisor, and began to offer the trading program to the public. He is now dedicated to this effort full time and remains as the largest investor in the Diversified program.

Darren can be reached at (214) 636-3133, or via email at Darren@SpreadEdgeCapital.com

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