SR's "free lunch"
Roy, nice article, my comment would be that 09/10 has tight ending stks, this the July premium as demand is firm. However Aug gets close to 2010 harvest and projected ES/use for 10/11 is not so tight, though things can change.
If beans stay strong, and the mkt moves up, you make 60 cents, am I right? If not you have just used up your July premium.
Re: SR's "free lunch"
Correct, you are using the July premium to stay long the board until late July. Another way to play this situation is to simply sell the cash beans and put the premium money in the bank for the next round. However, some people might want to stay long in the event of a major weather rally. This strategy would pick up part of the price appreciation in such a move. Personally I have only one small load of beans left, so I won't be doing any options spreads hoping for a big payoff!....Soyroy