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Properties of Grain Futures Contracts

Posted on Aug 21, 2011
Author: Richard Stooker

Four different grains are traded on the futures exchanges of the United States (I'm pretty sure that some foreign exchanges offer rice futures): corn, wheat, soybeans and oats.

All four have the same contract size of 5,000 bushels. The penny price of one contract (or the multiplier) is therefore $50. (That's .01 times 5,000.)

However, the grains are traded down to the fourth of a cent. Therefore, each tick is worth $12.50, and is quoted as cents per bushel. However, they are always quoted in eighths, so the denominator of the fraction is always an eight. So the minimum tick is 2/8. You can have 2/8, 4/8 and 6/8s.

Because the denominator is always eight, there's no reason to show it in price quotes. Therefore, if December corn is $4.25 and 2/8, you'd see it displayed as 425'2. The two is the fraction. That is written with an apostrophe in front of it, sometimes by a hyphen.

Of course it helps to trade these if you're familiar with the various kinds and grades of these grains. You should also know where they're grown, when they're planted and when they're harvested. Spring wheat and winter wheat are different, for example.

Weather has a major effect on these commodities. Too much rain during the planting season can delay it, reducing yield. However, too little rain during the growing season will also greatly reduce yield. So will diseases and insects. When the summer is hot and dry in the Midwest, grain prices go up.

Two types of commodity contracts are related. They're soybean oil, which extracted from crushed soybeans and used in food products, and soybean meal which is what's left over after the soil is extracted from the crushed soybeans. That's generally used as animal feed.

Soybean oil futures, or just bean oil, is traded in contracts of 60,000 pounds, and quoted in cents per pound. One tick is one-hundredth of a cent, and is worth $6. One contract cent is therefore worth $600.

The contract size of soybean meal is 100 tons. It's quoted in dollars and cents per ton. The minimum tick is 10 cents. Thus, a contract could be quoted as 235.10 or 235.20 but not 235.15. Each dime quoted is a tick worth $10.

Soybeans, soybean meal and bean oil are obviously related, since all depend on soybeans themselves. Some traders believe they can tell when one of these is mispriced in relation to one or the other or both of the other soybeans futures. They can trade what's called the crush spread.

Another aspect of these commodities is demand. People need food, but sometimes buy more or less on their household economics. And weather overseas can affect demand for U.S. grains. A hot dry summer in India can increase demand for U.S. wheat around the world, raising prices here as well as in India.

Of course, there is always a certain degree of demand, because people do need to eat.

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China's corn supply and demand situation and market situation analysis - corn prices - Food Indu

Posted on May 31, 2011
Author: xiaohe7383g

As the international Financial Crisis, domestic Feed Industry be hit, the national launch of maize (information, quotes) (information, quotes) Temporary reserve acquisitions, the main maize growing areas in Northeast drought took place in a larger, related factors are intertwined, so many companies and investors in corn future market development and price movements are particularly concerned about. September 2009, the State Grain Bureau, Dalian Municipal Government and Dalian Commodity Exchange co-hosted the Third International Corn Industry Conference, for the corn industry, the futures industry and other relevant parties to build a platform for communication, to discuss the future of corn market situation and development.

Currently, the United States, China, Brazil, Mexico, Argentina is the world's leading corn-producing countries, these five countries and to world production of over 70% of corn production. From the data, five countries among the total output continues to rise.

According to FAO (FAO) 2009 6 a report released last month the global corn output in 2009 was estimated at 791.8 million tons, accounting for 35% of global cereal production is about. The General Assembly is expected to the year 2012/2013, the world's corn acreage will be stable at from 138 million to 139 million ha between the yield will be 4.56 tons / ha to 5.12 ha and stability. Due to the increase in yields, total production increased to 820 million tons is also stable. Average annual rate of 1.34%. According to the U.S. Department of Agriculture and China's net corn-related statistics, in 2008, the United States produced 307 million tons of corn, China 158 million tons. The United States and China share of world corn production corn more than 60% of total production. Forecast in 2009, the United States produced 303 million tons of corn, China 159 million tons.

Since 1999, total global demand for corn has been around 6 million tons, showing a rigid growth. World corn consumption mainly in three aspects. The use of consumption, feed consumption, industrial consumption. As the global population continues to grow among the world's consumption of corn consumption in the process of natural growth, and stability of 1 million tons. Feed consumption is the most major consumer of corn means the ratio of 70% of total consumption. Currently, the number of global corn growth was rigid. The proportion of industrial consumption of corn by 0.5 percentage points per year has grown rapidly.

2009 corn planting area in China will reach 28.98 million hectares, compared with 2008, an increase of 18 million hectares. China's corn output is expected to reach 155 - 159 million tons. The third consecutive year as the domestic output, the current stock level or higher. Feed industry in the first half of 2009 to start production on sluggish performance, the total decline in the company's performance for the operations of large enterprises to accelerate the expansion of small and medium production decline.

Projected 2009/10 domestic demand for corn will total 154 million tons, up 2.7% over the same period. Although the growth process in maize, the main producing areas with drought and other bad weather resulted in decline, but last year the total inventory carried over 2,100 tons, the 2009/10 domestic supply and demand will balance.

The long term, we should also focus on the tendency of national policy support, feed demand conditions, the National Grain rotation as well as climate change and other factors. Since 2008 the price of domestic corn demand by international markets shrinking, H1N1 influenza A H1N1, Melamine Negative factors such as the impact of price increases fell once, to narrow down the corn industry profit margins, falling prices is limited.

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Commodities Grain: Wheat, Soybean, And Corn Markets

Posted on Apr 19, 2011
Author: Johnkitty

In trading Commodity Grain, the activity of hedge funds and index funds, and daily fluctuations in world currencies can affect and impact the "Volatility" which traders may find great and problematic in Grain Market. Moreover, these factors can influence on the Price action in Grain Futures in the nagative way. However, there are lots of unpredictable factors affecting prices action. It will be a good way to get information and discussion about Futures Wiki that provides basic knowledge about Future Commodities.

Traders and investors in trading commodity Grain find the big and wild moves in Grain Markets tough and difficult to predict. That is why this will cause the investors and traders to encounter the obstacles in Futures Trading Grains. To get rid of these problems, the traders and investors have to figure out the new strategies for Trading Grain in Future Markets.

Although Calendar spreads are popular with professional grain traders and investors, this strategy can be applied by any trader, in other markets. Lots of investors and traders are forced to find the solution for problems even though they don't have experience trading spreads.

Both new and experienced traders and investors may find these barriers hard for them to do business in Grain Markets. When there are some big moves in Grain Markets, the best traders and investors easily get stuck in those changes; and it is hard for them to escape from those problems.

However, it is obvious to notice that the price movement in spreads that is rarely impacted by the action in world currency markets is generally more true to fundamental market factors – basic supply and demand.

Article Source: http://www.articlesbase.com/business-ideas-articles/commodities-grain-wheat-soybean-and-corn-markets-1899242.html

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Trading Commodities - Commodity Types

Posted on Mar 19, 2011
Author: Amar Mahallati

There are several different types of commodities. Commodities are categorized so that it's easier to price compare, do research, and to make other trade tasks convenient. If you're an investor who wants to get involved in commodities trading, you need to know the basics. This is indeed one of the riskiest areas to invest in, but it can also be among the most profitable if you know what you're doing.

Energies

This area has been one of the most active in commodities trading recently. This category is comprised of products that are used to provide energy that will heat and power businesses and homes. The most common of these is petroleum and its byproducts, among them crude and heating oil, propane, natural gas, coal and some others, including subtypes or derivatives.

Each commodity has its own defined "tick" or price change; these are set by the exchanges. Each commodity also has a standard contract size. The standard contract size is the amount covered by a standard futures contract. For crude oil, for example, the amount is 1000 barrels. For wheat, it is 5000 barrels.

Grains

Wheat, oats, corn, rice and soybeans (although soybeans are not technically a grain) are agricultural products traded on various exchanges, including the well-respected Chicago Board of Trade, or CBOT for short. The exchanges trade the product as well as the futures and options contracts on these and other derivative products, such as bean oil.

Each of these products has its own tick or price change, standard contract size and unit. Some prices are listed in dollars per ton, such as with soybean meal. In this case, the standard contract size is 100 tons. It should be noted that most traders never see the actual commodity they trade in; you can see by the amount quoted here that there's a reason why.

Softs

Orange juice, cotton, sugar, cocoa and coffee are all what are called "soft" commodities. Many of these are traded on the Coffee, Sugar and Cocoa Exchange, or CSCE. It should be noted that 80% of the oranges grown in the United States are turned into frozen orange juice concentrate, and that it is the juice itself traded as the commodity, not the orange.

There's a relative newcomer on the New York Cotton Exchange, Frozen Concentrated Orange Juice, or FCOJ. This has been actively traded since the creation and widespread use and integration of inexpensive refrigeration, beginning after WWII.

Meats

Pork bellies, lean hogs and live cattle are traded on various exchanges, as are some derivatives. One of these exchanges is the Kansas City Board of Trade, or KCBT, which is the United States' livestock trading historical center.

One very unique commodity here is pork bellies, because the bacon that comes from pork bellies can't be substituted with a similar product. Their prices also usually interdependent with the price of grain, because hogs are fed a diet of corn and other grains. These prices are generally less volatile than they are within many other commodities.

Financials

Most traders invest in commodities futures or options rather than the good itself. Because of this, financial products are often listed on the same exchanges.

U.S. Treasury bonds futures are traded on the CBOT, as well as other places. A few indexes track stocks. The S&P index futures contract is one popularly-traded item.

It should be noted that some sites will list abbreviations showing the expiration month of the futures contract within the prices quoted. For example, these are shown are as follows, listed by quarter:

January - F, February -G, March - H
April - J, May - K, June - M
July - N, August - Q, September - U
October - V, November - X, December - Z

For example, you might see an item listed as PBH07; this is a pork belly contract that is due to expire in March of 2007.

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Visit 123OnlineTrading.com - Commodities, Stocks, Forex to find books, tips and advice about online commodity trading. Besides a large selection of free educational articles you can also find powerful books about online trading in general. Other Resources: 123OnlineCommodityTrading.com - Commodity Trading Links

Biofuels as Alternative Sources of Energy

Posted on Jan 19, 2011
Author: Chris Mason

Biofuels as Alternative Sources of Energy

Biofuels are produced by converting organic matter into fuel for powering our society. These biofuels are an alternative energy source to the fossil fuels that we currently depend upon. The biofuels umbrella includes under its aegis ethanol and derivatives of plants such as sugar cane, as well aS vegetable and corn oils. However, not all ethanol products are designed to be used as a kind of gasoline. The International Energy Agency (IEA) tells us that ethanol could comprise up to 10 percent of the world’s usable gasoline by 2025, and up to 30 percent by 2050. Today, the percentage figure is two percent.

However, we have a long way to go to refine and make economic and practical these biofuels that we are researching. A study by Oregon State University proves this. We have yet to develop biofuels that are as energy efficient as gasoline made from petroleum. Energy efficiency is the measure of how much usable energy for our needed purposes is derived from a certain amount of input energy. (Nothing that mankind has ever used has derived more energy from output than from what the needed input was.

What has always been important is the conversion—the end-product energy is what is useful for our needs, while the input energy is just the effort it takes to produce the end-product.) The OSU study found corn-derived ethanol to be only 20% energy efficient (gasoline made from petroleum is 75% energy efficient). Biodiesel fuel was recorded at 69% energy efficiency. However, the study did turn up one positive: cellulose-derived ethanol was charted at 85% efficiency, which is even higher than that of the fantastically efficient nuclear energy.

Recently, oil futures have been down on the New York Stock Exchange, as analysts from several different countries are predicting a surge in biofuel availability which would offset the value of oil, dropping crude oil prices on the international market to $40 per barrel or thereabouts.  The Chicago Stock Exchange has a grain futures market which is starting to “steal” investment activity away from the oil futures in NY, as investors are definitely expecting better profitability to start coming from biofuels.

Indeed, it is predicted by a consensus of analysts that biofuels shall be supplying seven percent of the entire world’s transportation fuels by the year 2030. One certain energy markets analyst has said, growth in demand for diesel and gasoline may slow down dramatically, if the government subsidizes firms distributing biofuels and further pushes to promote the use of eco-friendly fuel.

There are several nations which are seriously involved in the development of biofuels.

There is Brazil, which happens to be the world’s biggest producer of ethanols derived from sugars. It produces approximately three and a half billion gallons of ethanol per year.

The United States, while being the world’s greatest oil-guzzler, is already the second largest producer of biofuels behind Brazil.

The European Union’s biodiesel production capacity is now in excess of four million (British) tonnes. 80 percent of the EU’s biodiesel fuels are derived from rapeseed oil; soybean oil and a marginal quantity of palm oil comprise the other 20 percent.

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Article Source: http://www.articlesbase.com/diy-articles/biofuels-as-alternative-sources-of-energy-1487828.html

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Futures Trading - A Beginners Guide To Trading Futures

Posted on Oct 18, 2010
Author: Paul Davis

What is Futures Trading? Futures’ trading is a form of investment which involves speculating on the price of a commodity rising or falling.

What is a commodity? Most commodities you see and use every day of your life:

  • the corn in your morning cereal which you have for breakfast,
  • the lumber that makes your breakfast-table and chairs
  • the gold on your watch and jewelry,
  • the cotton that makes your clothes,
  • the steel which makes your motor car and the crude oil which runs it and takes you to work,
  • the wheat that makes the bread in your lunchtime sandwiches
  • the beef and potatoes you eat for lunch,
  • the currency you use to buy all these things...

... All these commodities (and dozens more) are traded between hundreds-of-thousands of investors, every day, all over the world. They are all trying to make a profit by buying a commodity at a low price and selling at a higher price.

Futures’ trading is mainly speculative investing, i.e. it is rare for the investors to actually hold the physical commodity.

If all this is a bit over your head, and you're looking for a solid day trading strategy, I suggest you join me on one of my live webinars by clicking here.

What is a Futures Contract?
To the uninitiated, the term contract can be a misleading however the term is used because a futures investment has an expiration date. It is similar to other forms of short-term contract. You don't have to hold the contract until it expires. You can cancel it anytime you like. In fact, many short-term traders only hold their contracts for a few hours - or even minutes!
The expiration dates vary between commodities, and you have to choose which contract fits your market objective.

For example, if today was June 30th and you think Gold will rise in price until mid-August. The Gold contracts available are February, April, June, August, October and December. As it is the end of June and this contract has already expired, you would probably choose the August or October Gold contract.

The nearby (to expiration) contracts are usually more liquid, i.e. there are more traders trading them. Therefore, prices are a true reflection of trading activity and less likely to jump from one extreme to the other. But if you thought the price of gold would rise until September, you would choose a back-month contract (October in this case).

Nor is there a limit on the number of contracts you can trade. Many larger traders/investment companies/banks, etc. may trade thousands of contracts at a time!

All futures contracts are standardised in that they all hold a specified amount and quality of a commodity. For example, a Pork Bellies futures contract (PB) holds 40,000lbs of pork bellies of a certain size; a Gold futures contract (GC) holds 100 troy ounces of 24 carat gold; and a Crude Oil futures contract holds 1000 barrels of crude oil of a certain quality.

A Short History of Futures Trading
Before Futures Trading, a producer of a commodity (e.g. a farmer growing wheat or corn) could find himself at the mercy of a dealer when it came to selling his product. The business of transacting between producer, agent and end-use needed to be legalised so that specified amounts and quality of product could be traded between producers and dealers within a specified time-frame.

Contracts were drawn up between the two parties specifying a certain amount and quality of a commodity that would be delivered in a particular month...

...Futures trading had begun!

In 1878, a central dealing facility was opened in Chicago, USA where farmers and dealers could deal in ‘spot’ grain, i.e., immediately deliver their wheat crop for a cash settlement. Futures trading evolved as farmers and dealers committed to buying and selling at a specified time in the future. For example, a dealer would agree to buy 5,000 bushels of a specified quality of wheat from the farmer in June the following year, for a specified price. The farmer knew how much he would be paid in advance, and the dealer knew his costs.

Not too long ago futures markets consisted of only a few farm products, but now they have been joined by a huge number of tradable ‘commodities’. As well as metals like gold, silver and platinum; livestock like pork bellies and cattle; energies like crude oil and natural gas; foodstuffs like coffee and orange juice; and industrials like lumber and cotton, modern futures markets include a wide range of interest-rate instruments, currencies, stocks and other indices such as the Dow Jones, NASDAQ and S&P 500.

Who Trades Futures?
It didn't take long for businessmen to realise the lucrative investment opportunities available in these markets. They didn't have to buy or sell the ACTUAL commodity (wheat or corn, etc.), in order to trade the price movement of a commodity. As long as they exited the contract before the delivery date, the investment would be a simple trade. This was the start of speculation in the futures markets, and today, around 97% of futures trading are speculative by nature.

Article Source: http://www.articlesbase.com/day-trading-articles/futures-trading-a-beginners-guide-to-trading-futures-821956.html

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Andrew Baxter is one of Australia's most highly regarded trading and investment educators. Andrew is also a co-founder and facilitator of the Elite Traders Group, Options Trading Mastery and various other educational programs aimed at leveling the playing field between professional and private traders. For More Information About Andrew's Free Educational Webinars and Resources, please visit the Elite Traders Group Website: http://www.EliteTradersWebinars.com.au

Grains Market Review On March 4th

Posted on Sep 10, 2010
Author: Sammy Robinson

Calls: Yesterday saw a mildly exciting upside move with beans and wheat extending gains while corn fights back for lost ground. Meal hammered oil due to a possible peace deal in Libya with crude backing off as profit taking was seen. Gold and silver took it on the chin with money moving into currencies again with talk of rate raises seen in the EU. On the fundamental side markets saw little but demand is present as seen in the CN-CZ spread and the SN-SX spreads. Both widened on the bull flat price move with interest in seeing SN-SX back above 80 in the near future. Bean demand from China and corn demand from Japan and Mexico are the relative catalysts there. I think the technical side of the trade remains bullish with positive stances seen in all indicators. No talk from weather with more information from Brazil pointing to increasing storms over Paranagua and Mato Grosso. This puts their second crop corn in jeopardy if coupled to the current harvest delays. The window is minimal so their time is short. The overall feeling was one of apathy with the upside move being that no new price ground was discovered. It needs to break above $7.44 in CK, 1402 in SK and 840 in WK to get any real excitement...sadly. Things are a bit stuck right now and the trade is waiting for more information out of Brazil or the Delta before making their next big move and I do not blame them. I see so much right on the horizon let's simply add a bit of risk premium back into the market and see what weather does with harvest in the south and planting here. Heading into the afternoon there was little fresh information to help change the bias heading into the night session. The overnight session opened sluggishly lower on minimal volume but that was countered with a story coming out of Argentina that their tax agency has suspended Cargill, ADM and Toepfer from the ONCCA export tax exemption. This would raise their tax burden from 2% to 15%. The same agency is limiting the number of export licenses granted from now on. This will force more origination to US shores in coming weeks if coupled with the weather problems in Brazil. This supports a widening of SN-SX. The whole agricultural complex closed at or near highs with bean oil showing good strength against meal today reversing yesterday's beating. KC and Minni backed off slightly on profit taking from recent contract highs. Bull spreads won overnight and look to continue winning throughout the day session. Heading into Friday markets have support from crude, the USD, cotton, sugar (modestly) and technical momentum. There is no overt excitement so look for another choppy higher session lacking a smoking gun unless something erupts in the Middle East heading into the weekend .The bullish bias remains intact heading into the heart of March.

Beans are called 6-8 Higher looking to get above the small consolidation range sitting between 1418-1422 with momentum in favor of bulls. I believe indicators are in a strict positive stance with plenty of room to the upside. The contract high at 1467.75 is the only upside target left. Corn is called 2-4 Higher looking to move against the contract high at 744.25 with any outside help today. Once above $740 there is nothing to stop the move but there will be profit taking heading into the weekend so look at a quick move above this level as a profit taking decline and a pause in the bull market. Indicators are in a positive stance with room to the upside. Wheat is called 8-10 Higher with KC and Minni looking modestly weaker than us. It is breaking out of the wide short term consolidation channel with the 50-day sitting at 840 ½ acting as the next upside target. Indicators are in the bottom end of the range in a positive stance offering the best formation of the big three commodities. Meal is called Flat-1-dollar Higher looking for a reason to move above the 50-day MA sitting at 375.00. Indicators support a positive stance moving forward. Bean oil is called 50-60 points Higher with the overnight matching yesterday's high. Above 59.35 look for a move against the contract high at 60.50 in the coming session.

Fundamental: The Russian PM overnight stated they will have to expand their grain export restrictions to the end of 2011. The original date for removal had been the end of June. This was generally expected by the trade but shows the damage to their winter crop is greater than expected.

Asian (Chinese and Indian) markets were higher overnight helping the bullish sentiment with Indian beans up 1% and their oil up 1.1%. This is due to Chinese demand talk and problems with Brazilian loading.

Argentinean farmers continue to protest but this is a lack luster protest at best. If feels more like they are just avoiding work rather than actually arguing about wages. The deal is expected shortly.  

Argentina suspended Cargill, ADM and Toepfer from a key grain registry program. This will raise their tax burden to 15% from 2%. This is in response to documents gathered that stated they are not paying their "fair share". They will be added to the list again if they pay the back taxes. This is delaying shipments with even loaded boats not able to leave port without documentation that is being withheld. This is a bigger deal than the most recent raids and needs to be addressed by these multinational companies. The supply disruptions will make China nervous.

Rains and sleet remain active over the Midwest with the central eastern delta getting another drink. The recent rains have recharged their top soil moisture levels while leaving their subsoil lacking. This will allow for fieldwork and planting but they will need early timely rains to help solidify a root system to protect against any summer heat stress.

Continued rains in Brazil centered on the central and northern regions with another 2-6" expected over the next 10-days. This will continue to stall loadings out of Paranagua causing more and more to come to US shores.

The US AG Attaché pegged Argentine bean production at 49 MMT with exports at 13.75 MMT. This is generally expected by the trade with a fair production range now between 48-50 MMT. The trade is leaning closer to 50 MMT due to recent and timely rains. 

Open interest shifted as follows: Corn +1717, Beans +2564, Wheat +2005, Meal -132 and Oil -515. Nothing exciting here shows the lack of fresh participation but a lack of interest in selling any pop shows a bull sentiment.

MACROS: Are helping but there is only minimal momentum. The US jobs report was bullish the USD and bullish stocks with the levels falling to 8.9%. This may have been priced in yesterday with the big move then.

Gold is trading .60 higher sitting at 1417.00 per troy ounce.    
Crude is trading 1.49 Higher sitting at 103.40 as of 8:30 CST.   
The Euro is .0009 Higher against the USD trading at 1.3974 consolidating just under $1.40.       
The Yen is .22 Higher against the USD trading at 82.63. 
July Cotton is trading .700 Higher sitting at a new high of 202.97.

Daily Wisdom: A creative man is motivated by the desire to achieve, not by the desire to beat others. - Ayn Rand

Article Source: http://www.articlesbase.com/day-trading-articles/grains-market-review-on-march-4th-4358392.html

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Matthew Pierce, Grains Guru

Grains Guru Writer of Pitguru - Learn more about Sugar futures & Crude Futures Trading. Past performance is not necessarily indicative of future results.

For Futures Trading: Financials and Soft Market Information

Posted on Sep 03, 2010
Author: Tony Lee

We are going back with the futures trading markets. If you care about these markets, you may wonder how they are going on, if there is any change in the market? I will not let you wait for long. This time, we will stop by the financial and soft home to discover new information this week.

It seems that financial market put much control on the others. Changes in this market always influence in wide rank. So, we would better stop by financial home first. The market is waiting for the Federal Reserve meeting in the latter part of the week. That should the government keep buying toxic assets to help with the recovery is in argument. We are expecting that the Fed may keep rates as is and give some supports to the current market. This is a chance for officials to ask where the market is headed. It is important to listen to the language that will be announced.

Investment banks had one of their best years last year. However, this year it may be difficult for them to duplicate results. Volume is supposedly down significantly. According to analysts' speculation, the 2010 forecast for profits may be lower. New stock offering are down 15%, in the mean time bond issuances is down 25% from last year. Due to Congress' new regulation, Goldman and Citigroup will not be allowed to have sole proprietary desks. Financial firms hired employees because of a stellar 2009 but now have more mouths to feed. That this could also cause lower profits is what we do not expect at all.

Turn to the next aspect in fiance, the S&P was up slightly 1.50 points to 1122.50 while the DOW was up 16 points to 10558.00. The market is looking for some sort of positive language from the President today. His job as President is to keep Americans calm and to give some supports to the markets. Put down long term worry about the market, our daily job is be back to the currency converter calculator to check for the currency exchange rates today. The number affect directly on our business, so don't be late!

Financial+futures.jpg

Chart courtesy Gecko Software's Track n' Trade Pro
Past performance is not necessarily indicative of future results.

We don't have much time to view all the aspects, so now turn to the Softs home to get closed to the Coffe and Sugar markets. Coffee prices remain close enough to $2.00 that it seems the long term objective of 208 is just a matter of time. Yet for the past few weeks, it has regularly been mentioned how this market feels heavy to traders. They continue to hold onto their objective, but feel a violent drop (can and will) gain momentum if given technical help. For instance a break below 185, or 182 in KCZ could feed on itself. So again longs should be wary. And here is our expert saying: "I'm not saying it'll see a drop to 175, or 165, but hey stranger things have happened."

Soft+futures.jpg

Chart courtesy Gecko Software's Track n' Trade Pro
Past performance is not necessarily indicative of future results.

About Sugar, it too looks headed for 2650, and this morning SBV has already reached 2560. Remain a friend to the long side, but as mentioned previously, "never marry a position."! Exchanging vows with a position can only lead to an ugly divorce. Owning downside protection via puts may be costly, but it may also prove a prudent prenuptial agreement.

You have just finished visting some futures market homes to have an outline of things are going to happen. Plan for your business carefully and make sure you are in possitive positions! For the best supporting, check out the daily futures prices to have a full view of the markets. I will be back with you guys next week for the new information. Bye from now, wish you a successful trading week!

Article Source: http://www.articlesbase.com/day-trading-articles/for-futures-trading-financials-and-soft-market-information-3314085.html

About the Author

I'm a trader in futures trading floor. I'm always eager to learn and share. Reading and searching are my hobbies.

Futures - The Purpose, Types, and History of Future Contracts

Posted on Jul 17, 2010
Author: William Smith

Futures are a mystery to most people, even some otherwise savvy investors. Ironically, futures (or their predecessors, "forward contracts") are some of the oldest financial instruments known to man.

The Purpose of Futures

Futures are man's attempt to conquer fate. That may be putting things a bit dramatically, but the truth is that man is rarely comfortable with uncertainty, and futures allow people to eliminate, or at least reduce, life's ambiguities.

For example, when a 19th century farmer sold December corn futures in May, he knew exactly what price he would be getting for delivery of his crop, seven months ahead of time. This is the usefulness of futures.

Commodity Futures

The most common type of futures still stem from commodities. Corn, wheat, oats, soybeans, and sugar, as well as crude oil, natural gas, live cattle, and pork bellies are all examples of commodity futures. A farmer can sell a futures contract in order to lock in his price, and then buy back the same contract at a later date, either for a profit or loss, in order to avoid making delivery.

It is often impractical for a futures trader to either deliver or accept large quantities of corn or cattle, so most times; contracts are "closed out" in this fashion. For people who have an actual interest in the commodities (farmers on the sell side, large users of the commodity on the buy side), this can be seen as a form of insurance.

For people who do not have a real interest in the commodities, this is seen as speculation, or the attempt to profit by predicting price movements of the future contracts.

Financial Futures

In addition to commodities, future contracts for various financial instruments are also actively traded. There are futures for various stock indices, Federal Funds interest rates, and almost everything imaginable. The amazing thing about these futures is how accurate they tend to be.

As explained in the book, The Wisdom of Crowds, the large pool of participants in these markets create an almost supernatural, hive mentality that has an uncanny knack for getting things right. If the futures market anticipates a Federal Funds rate hike, then chances are, there is one in the works.

A Brief History of Futures

Future contracts evolved from "forward contracts." These were handshake agreements made between 19th century farmers and large buyers of their crops or livestock. For example, a farmer might have agreed in May to deliver 5,000 bushels of grain to a miller in September, at a set price.

This cut down on the stockpiling by stockyards that created price disequilibrium - the stockyards would buy grain cheap when supplies were high, and then sell it for a huge profit later in the year when their supplies began to dwindle. Farmers and large buyers decided to create forward contracts in order to eliminate these middlemen.

Unfortunately, there were problems with forward contracts. For one, buyers and sellers had a hard time finding one another - unlike in the financial markets of today. And more importantly, buyers and sellers could each renege on prior agreements without much consequence.

Future contracts, by contrast, are standardized, which makes finding buyers and sellers much easier. And they are regulated by exchanges, who enforce the contracts, if need be.

The Modern Futures Market

Today, futures are traded in the world's greatest financial marketplaces. Some of them include the Chicago Board of Trade, the Chicago Mercantile Exchange, ICE Futures, Euronext, the London Metal Exchange, the Tokyo Commodity Exchange, the New York Board of Trade, and the New York Mercantile Exchange (NYMEX).

Today's most popular commodities include crude oil and natural gas, as well as various metals, such as gold, copper, silver, and platinum.

Article Source: http://www.articlesbase.com/non-fiction-articles/futures-the-purpose-types-and-history-of-future-contracts-80174.html

About the Author
William Smith the author provides much more financial information on many subjects as well as the secret to his success in the market along with 5 Free power stock picks emailed daily so grab your Free subscription on his website at Futures (All is Free)

Wheat Market : World Wheat Facts

Posted on Jun 21, 2010
Author: Tony Lee

Today, we will talk about WHEAT TRADING. It's not only to traders or investors trading or interesting in commodities, but also to most of us, WHEAT is not strange term any more. Yes, we know what is wheat, but how about wheat trading? Since there are still many facts about agricultural wheat or wheat trading that sound strange to us, even to traders in the floor, today we will discover the world of wheat. Despite you want to get more knowledge to talk to friends in conversations or to gain knowledge for your trading, the topic today "World Wheat Trading Facts" will bring you interesting and helpful time reading.

Because of the differences in wheat condition between regions to regions, like other kinds of trees, wheat cannot grow in all places in the world. It is produced in some special regions of the world that provide the proper growing conditions like North America, Eastern Europe, Russia, and Australia. Talking about this places where we can grow wheat, there will be an interesting thing. You might note about the coins? If not, you can look at one. You know, on the other side of the coins is the nations where lack the climate necessary for growing wheat. These discrepancies cause the world wheat trade, and the factors affecting the discrepancies show up in the price wheat is traded at.

Now, we will turn to check out the countries that keep the most influence on the whole markets. According to analysis since 1960, the global wheat trade has grown almost four times in size.  In 2008, approximately 120 million metric tons (MMT) of wheat exchanged hands on the world market. Do you know who the leader in global exports is? I mean the leading seller on the global market. The United States is our answer. As reported, last year the U.S. accounted for 35 MMT of wheat exports. Surprisingly, that was almost 30% of the world's exports while Canada was a distant second in global exports at 16.6 MMT. Why we need to care about these numbers? It's important to understand conditions that effect crop producing regions in these areas as they consequently affect global supply and the price wheat is traded at. The importers of the world carry less market weight individually than the exporters.

To help you guys have a full view of the market, we will follow some examples or facts to see how the market has been going. Egypt, for example, the largest global importer of wheat, bought 7.7 MMT on the world market (about 6.6% of the world's imports). You may wonder why the importers are smaller in individual volume? The answer is because of the largest producers of wheat tend to be the largest consumers of wheat. Back before the age of fast and efficient global trade, the majority of food consumption came from domestic production. Thanks to time, this seems to become one of interesting parts in their culture: people had to eat what they grew. Areas that aren't historically known for wheat consumption aren't big consumers now, and that's why imports are more spread out than exports. Even though the importers carry less market weight individually than the exporters, their aggregate demand is equal to the aggregate export supply. To talk about this point will be a long story. But, for it is necessary, you should need to research more when trading wheat or commodity futures because both sides can affect the price wheat is traded at.

Another point that we should mention to is importers and exporters of wheat are some of the largest players on the wheat market. Therefore,  it's important to keep an eye on domestic production and consumption. It's all about expectations. If these large users of the global wheat trade need to buy or sell significantly less/more than their original plans, it may cause market move. The news on this is so important to wheat traders and investors. Yes, how the market moves will affect on the prices and their profits. Because of the price information importance, it is updated daily. You'd better to keep track with not only wheat price but also silver price, gas price or other interactive futures market for your trading. Understanding the details of global supply and demand is imperative to becoming a wheat trader.

Article Source: http://www.articlesbase.com/day-trading-articles/wheat-market-world-wheat-facts-3477726.html

About the Author

I'm a trader in futures trading floor. I'm always eager to learn and share. Reading and searching are my hobbies.