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As anyone associated with agriculture knows, El Niño is a significant factor in the marketing of everything from rice to corn. The warm temperatures and variances in regional precipitation can boost or compromise almost any crop’s yield. Futures market fallout is often extensive, prompting proactive risk management by using weather trading strategies. Although unique in… Read more.
As far as natural disasters go, few are more devastating than a hurricane. High winds, storm surge, and heavy precipitation can create uninhabitable living conditions. They are also capable of rendering crops useless and sending shockwaves through the ag markets. Hurricanes strike the Southeast region of the U.S. almost every year. Disruptive weather patterns are… Read more.
#1 Rule of Cash Marketing: Win the Basis Game with Futures and Options
The release of an economic data report can dramatically increase the degree of volatility facing a broad spectrum of asset classes. Metals, energies, currencies, and agricultural futures contracts are susceptible to wild swings in pricing following an official announcement.
The production of ag commodities is more than just a business, it’s a lifestyle. Whether a producer is cultivating grains, nurturing livestock, or processing dairy goods, efficiently delivering a tangible product to market is the name of the game.
Energy costs are an unavoidable reality facing a broad spectrum of industries. For example, if you’re involved in transportation, agriculture, or even retail, it’s likely that you have a line item on the monthly budget exclusively for energy.
One of the most unpredictable and influential factors facing economic output is the weather. Natural disasters, abnormal seasonal extremes, and even unexpected precipitation levels can have dramatic consequences on both industry and consumption.
From a production standpoint, it’s an undeniable truth that core-business proficiency is crucial to staying profitable over the long haul. Whether you’re marketing energies, metals, or agricultural products, efficiency is a primary determinant of your success.
The relationship between the cash value of a commodity and its counterpart in the futures market can be complicated. Depending upon the product and market being traded, strategies to capitalize upon the correlation may be equally complex or relatively simple. The modern futures marketplace gives producers and processors the ability to efficiently mitigate risk through “hedging” the value of their products.
After a market becomes parabolic on news or events, unfounded or not, it may not necessarily retrace to prior price levels. Or at least retrace even in the expected timeframe. There may be actual underlying fundamental or technical reasons for such a move that comes to light in the after math. However, if you can identify low cost and low risk opportunities you may be able to take advantage of a potential retracement. Look no further than the recent hurricane season.