For the next week I intend to have a look at the corn market, as corn and soybeans are substitute goods: they share growing seasons at similar latitudes, climate, a common currency, fuel costs and transportation needs. Therefore understanding of market correlations of these two commodities it is very important in the process of trading. With correlated markets, one move fundamentally supports to the anticipated directional movement of the other.
However, my intention is to look also for information related to corn and wheat and to trade something else than soybean. Of course, I need to be very careful with my present contracts on soybean, which for the moment are all short on January 2013. This means that I don’t have the advantage of a spread trade that I had on week one.
http://www.csidata.com/ua/CorrelationInstructions_wcorr/Instructions.html
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