Play Turner’s Take Ag Marketing Podcast Episode 302

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This week we go over the Ukraine/Russia war and how it caused limit up moves in the wheat markets. We then take a deeper dive into May Chicago Wheat and why it was the leader of all wheat contracts.  We end with a discussion on how we derive synthetic values using May SRW Wheat as an example.  Make sure you take a listen to the latest Turner’s Take Podcast!

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Synthetic Trading Values

During the podcast I did a live market example of determining May Chicago Wheat synthetic values.  I have a screen shot of a similar example below.  May Wheat is limit up at $12.09 but synthetically it was trading at around $12.60.  Here is an example from today on how we figured out the synthetic value for May SRW Wheat.  Please see quote board below as a reference for the example.

• At 12:58pm CT today May Wheat was locked limit up at $12.09; up 75 cents on the day
  
• July Wheat was trading at $11.5050, only up 34.25 cents.  While May was limit up, July was still trading freely
  
• The May/July futures spread was also trading freely.  The limit for futures spreads is twice the daily limit for flat priced futures.  May/July as at $1.0950, up 91.75 cents on the day, but the limit for futures spreads is $1.50 (75 cents X 2)
  
• When May/July is at $1.0950, that means May is trading $1.0950 over July
  
• July is freely trading at $11.5050
  
• $11.5050 (July) + $1.0950 (May/July spread) = $12.60
  
• May Chicago Wheat futures were trading at $12.60, another 51 cents over limit at the time of the screenshot below.
  

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If you are having trouble listening to the podcast, please click here for Turner’s Take Podcast episodes! Craig Turner – Commodity Futures Broker 312-706-7610 cturner@danielstrading.com Turner’s Take Ag Marketing: https://www.turnerstakeag.com Turner’s Take Spec: https://www.turnerstake.com Twitter: @Turners_Take Contact Craig Turner

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About Craig Turner

Craig Turner is a Senior Broker at Daniels Trading, author of Turner’s Take newsletter, and a Contributing Editor for Grain Analyst. Craig is often quoted in the Wall Street Journal, Reuters, Dow Jones Newswire, Corn & Soybean Digest, and also makes appearances on SiriusXM – Rural Radio Channel 80 providing commentary for the Grain and Livestock markets. Craig has also been featured in FutureSource’s Fast Break series, Futures Magazine Online, and INO.com. Mr. Turner has a Bachelors from the Rensselaer Polytechnic Institute (RPI) where he graduated with honors and has worked at the NYSE and Goldman Sachs. While at Goldman, Craig earned his MBA in the NYU Stern executive program. Learn more about Craig Turner.