Category: Cool Source of Information

That title may have been a tease, but I can get lost in maps for hours, so for any like-minded map lovers out there, the National Corn Growers Association is a surprisingly active website with news, information, and analysis of all sorts:

http://www.ncga.com/drought

Interestingly, their response to the USDA report’s corn harvest forecasts don’t mention the counteraction from Obama’s re-election and its results on ethanol production.

This week I stumbled quickly on a great recap of the week’s markets, at ForexPros; an excellent, concise weekly outlook informed by summaries of last week’s activities:

http://www.forexpros.com/news/commodities-news

On a more newsworthy note, for those of you trading corn, Stephen Colbert has reported on a brilliant continuation of last week’s news that cattle farmers are turning to (HFCS-filled) candy as a more affordable feed for their cows than (HFCS primary ingredient) corn itself.

http://www.colbertnation.com/full-episodes/thu-october-18-2012-the-killers

Plus, for anyone unfamiliar with Americana, Colbert’s story about the Corn Palace is also definitely worth watching. (It follows his story on “candy corn.”)

I’m trying to figure out how to enter a spread this week, which means I’ve found seasonal trend charts useful from Futures Buzz: http://www.futuresbuzz.com/seasonal_charts.html 

In what I believe is evidence of how backward many US agricultural policies have become, candy has become cheaper than corn (and, more importantly, fresh vegetables for humans to eat).

However, imagining cows eating gummy worms does bring a smirk to my face.

http://www.dailyfinance.com/2012/10/10/cash-strapped-farmers-feed-candy-to-cows/

Does this mean we should be considering sugar as a substitute for corn in evaluating market supply and demand? But aren’t gummy worms made from HFCS anyways? – meaning this practice is even more convoluted than it seems, hence the nutritionist’s observation that candy provides cows with “the same kind of energy as corn.”

Something fun this week – after screwing up royally with what I thought was a profound revised understanding of basic market dynamics, I returned to my finance class notes from last winter, and I found the link to this movie clip from Trading Places, with an excellent explanation.

http://www.popmodal.com/video/1277/Trading-Places-Final-Exchange-Scene-amp-Explanation

In researching the decline in the corn markets over the last week, I found the CME Group’s Volume and Open Interest Report, here: http://www.cmegroup.com/daily_bulletin/preliminary_voi/VOIREPORT.pdf

It would doubtless be a lot more interesting if we were trading options, but there is interesting information about the volume of trades in various futures markets as well.

See page 2 for daily volumes in agricultural futures. I hope to keep track of this over the next few days (weeks?) to get a sense of whether liquidity affects the futures prices or volatility.

Also, what is a swap, is it more associated with options trading, and does it affect futures trading?

Since I am in Europe this week, I thought I would look into some European news sources. Rabobank is familiar to me as a sponsor of the Tour de France, but they produce monthly agricultural commodity reports with good summaries and comparisons of production, stock, and market levels of various agricultural commodities.

It reports basic market trends and predictions, but it also simply links market movements with related products, like ethanol for corn (below), and different grain usages like feed and residual production.

This report, combined with more recent information about contract prices, was useful in determining whether the recent fluctuations in the corn markets were an indication of upcoming volatility, or a fluke.

Find the Rabobank September report here: http://tinyurl.com/8v5kser

This week, after entering the market on corn futures, I decided to try a different commodity, since this is a good time to start understanding many sides of the market with simple trades. As a newcomer to market trading of any kind, and as someone much more comfortable with qualitative analysis than quantitative, I have been reading reliable sources like Bloomberg and Reuters.

On the Wall Street Journal, I found market data for each commodity. Below is the chart showing historical trends in the wheat markets.

On this Wall Street Journal Market Data Center website, you are able to see detailed data and trend graphs for (presumably) all the futures on the market for each commodity.  With such a great scale of historical information, I was able to notice that wheat futures have been fluctuating in the last two months around a consistent level, so I went long and short in nearby futures to observe the difference between the different contracts of the same commodity.