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Non-straight arbitrage on commodity market

Short
The commodity market, including the agricultural sector, shows a steady growth in prices.
The growth in the value of corn futures was influenced by the economic recovery, favorable weather conditions and yields. But back in the summer of 2020, prices for this view were at historic lows. Then I drew attention to one feature. Based on the reports of summer maize companies in 2020, most of them were in the zone outside the profitability of production, thereby the companies suspended corn crops and instead of the traditional use of futures for hedging (that is, instead of the usual short deals), the companies began to buy futures . At that time, manufacturers accounted for about 2,000 contracts out of all completed purchase transactions.
Poor margins due to falling corn prices, as well as deteriorating weather and sales conditions in summer 2020, resulted in below-expected (or historical) yields and a hundreds of percent increase in corn prices. The recovery in prices was also facilitated by the transition of manufacturers from liquidity providers (selling futures ) in the market to the side of liquidity withdrawals (buyers of futures ), and the recovery in demand in China, which is the largest consumer.

This idea is that the fundamental rationale for the rise in corn prices has exhausted itself and most likely in the future, prices will begin to stabilize. That is, the expectation that the cost of this product will decrease from the current one. But for the purposes of more accurate trading and the possibility of not directly hedging oneself from the possible continuation of price increases, I propose to consider the possibility of indirect arbitrage.

The graph shows the ratio of corn prices to wheat prices, which shows the historical average, which I compared between 200MA and 50MA. Thus, it is possible to hedge the risk of possible further inflation of prices in the commodity market and the possibility of earning money on the return of this ratio to average indicators.

The idea is to buy wheat and sell corn through derivatives. In addition to the fundamental and technical rationale, you can add my observation that China, due to the increase in the cost of corn prices, began to buy more wheat . The volume of supply and demand also begins to move towards equilibrium (median).

Good luck to all

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