future is easy to associate than stocks?

Discussion in 'Ag Futures' started by kelly55, Sep 9, 2006.

  1. kelly55

    kelly55

    I f the cicago corn price go up,
    otheir corn will go up too?
    same as these pattern, every related crops will go up?
    so easy to
    associate ?
     
  2. Not at all. Spreads of corn versus soybeans, for example, are quite common. Even intermonth spreads are common. (For example, Corn Dec '06 against Corn Dec '07).
     
  3. kelly55

    kelly55

    Even same corn but different month will move different way, one is go up, another is go down?
     
  4. Yes. If there is a drought the nearest contract price can increase a lot but the next contract price might not increase and price can decrease.
     
  5. kelly55

    kelly55

    generally so?
     
  6. Yes, generally so. Look at the Dec '07 vs Dec '06 corn contract. People believe ethanol is going to really take off next year and make corn very expensive. The premium for the far contract goes way beyond simple cost-of-carry. If Ethanol doesn't look like it will explode next year, or it becomes cheaper to buy corn now and store it, the dec '06 contract will go up, and the Dec'07 contract will come down.

    Look at crude oil and notice that the first delivery is less expensive than the second delivery. So, crude consumers are stocking up on oil because its cheaper to buy now than later. And crude is generally a backward (rather than contango) market.
     
  7. kelly55

    kelly55

    So making association is difficult for futures,
    stock is much easy for association,
     
  8. kelly55

    kelly55

    How can you expect this crop will go up,
    that go down?
     
  9. kelly55

    kelly55

    crop futures are not suitable for daytrading ?
     
  10. any futures are suitable for daytrading, assuming they are liquid enough for the style of trading you employ.

    I'd suggest that they are not suitable for you to daytrade since you dont seem to understand the fundamentals of the market you are looking to get involved in.
     
    #10     Sep 12, 2006