ZC

Discussion in 'Commodity Futures' started by Kirribilli, Sep 21, 2014.

  1. Thinking of getting long on corn here. Caveats?

    Thanks.
     
  2. TraDaToR

    TraDaToR

  3. Brighton

    Brighton

    Given the mostly flat price activity in corn and wheat (Chgo) from late July to about the first of Sept, I thought most of the bearish news had been factored in, too. That was obviously an incorrect assumption. The harvest weather for the next week to ten days looks good, take a look at one of the commodity indices, take a look at gold, silver, crude, nat gas, iron ore, coal, etc, etc -- there's not a lot of speculative enthusiasm in commodities right now. With a massive corn harvest in the US and plenty of wheat worldwide (including some low quality European wheat that might trade as feed wheat/corn), I just don't see a near term catalyst to send things higher.

    All that said, corn is trading below the cost of production and that won't continue forever, but it certainly can for a while.
     
  4. Strong contango can make you loose a lot of money (11 %/year) even if cash prices are flat...
    Corn yield could be underestimated given the strong early yield. Sometimes 200 bushel/acre !
     
  5. Any spread suggestions, while some of us wait?
     
  6. Storage charges between now and next Summer should widen out in order to keep supply off the market, i.e. bear-spreading the front-months versus long May15 / July15. You might make a few cents per spread. ;)