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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.
Politics and commerce often collide, leaving the business community mulling uncertainty while preparing for fallout. With the election of pro-business candidate Donald J. Trump to the U.S. presidency, foreign trade policy was slated to undergo intense scrutiny. A focal point of the new administration was to be a swift reduction of the U.S.–China trade imbalance.
The introduction of the North American Free Trade Agreement (NAFTA) in the mid 1990s marked the beginning of current U.S.–Mexico economic relations. With a legislative backdrop conducive to the free-flow of imports and exports across the U.S. southern border, both countries were in a position to expand economically through broadened regulatory cooperation.
CORN Corn futures posted a solid close on Friday, despite the higher than expected acreage figure. We continued to trade higher in the overnight session. Weather was getting the attention of traders and that helped to support the market. Crop condition ratings will be updated on Wednesday morning. Expectations are for steady to lower conditions… Read more.
In the trade of agricultural commodities, making an efficient and timely delivery to the marketplace is often a costly and competitive endeavor. Conflicts arising over the availability of transportation resources can present formidable challenges to producers, processors and consumers.
January soybean futures have been trading around support in the 850 area. Sunday night they attempted a downside breakout below that level; the rejection of the downside move proved to be a Taylor Trading Technique Buy day.
The grain futures are often good trading markets for trade setups using the Taylor Trading Technique. Today’s Taylor Trading Sell Short day for the soybeans was a good example.
If it had not been for Wheat, human beings may never have socially and culturally developed as cosmopolitan as we have. Wheat was the first crop to be cultivated on a grand scale and stored long-term, enabling the start of city-based societies and the dawning of civilization.
Senior Broker Drew Wilkins reviews the April 9th 2015 WASDE report.