The Way Ahead
The fiscal cliff will give a negative influence on future market. I will offset my long contracts of soybeans as soon as possible.
I will not go short contracts of corn next week,because the Environmental Protection Agency has rejected requests from several governors — including Virginia’s — to waive fuel standards that require more corn to go toward making ethanol.The renewable fuels law will require production of 15 billion gallons of ethanol by 2015, up from 13.2 billion gallons this year.That will require an increasing amount of corn, which is used in making ethanol. That’s great for corn producers, who are seeing their crops’ prices go up, but bad for other farmers — like poultry and swine farmers — who are watching feed prices go up as well. There is an conflcting indicators in corn markets. It is hard to make a prediction.
In compairson, it is easy to make a prediction in soybean markets. The soybean price is predicted to fall in the next week because of the strong sign of fiscal cliff.
I will go short of soybean next week.