Despite numerous uncertainties in the market, I am confident that as long as I keep track on the grain price analysis, I will eventually get a good grasp on what positions and contracts are sensible to take on in the market. As a risk adverse investor, I tend to look for conservative investments, in which commodities are relatively less volatile, and thus, I can hold over a longer period of time without worrying too much about price spikes.
I would say, most likely, I will be investing in wheat contracts over a long term period for about two weeks or more. As for other corn and soybeans, I am not entirely confident about these two markets, and thus, if I do invest in either of them, I would need to do my research thoroughly prior to investing.
This year, some analysts stated that after a warm spring and early planting, corn inventories could come in higher than expected due to an unusually early harvest. However, thecorn harvest outcome contradicts with ex-ante prediction of higher harvest. It turns out that corn inventory has a tighter supply. Consequently, one could not predict precisely the outcome of harvest, whether it will be higher than expected based on historical records. In fact, there are many volatile factors in futures contracts such as changes in storage costs, time to delivery or harvest, and seasonal patterns.
Hence, this is consistent with the market analysis for corn stocks on DowJones News Wire. As Brain Hoops one of the analysts from brokerage Midwest Market solutions said, “corn could have a major swing.”