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No, I wasn’t kidding. I went to the market yesterday and found atleast one brand of milk that was $3 a gallon vs. $6, New York steaks for $3.47/lb vs. $8+, strawberries $1/lb vs. $3/lb, bananas $.50/lb. and stock was much fresher than it was 2 weeks ago.
I live in Southern California.
Does anyone have any literature on this.
Have you ever heard investors mention speculating in futures of the commodity market and wondered what it they are talking about? While most of us are familiar with investing in stocks, commodities can be an interesting way to have your money make money for you.
But first, you might ask what is a commodity? commodities are goods we are each one portion is the same as the other. For examplee, oil is a commodity because one barrel of oil is the same as the next. Wheat is also a commodity each bushel of wheat is identical to every other bushel of wheat and anyone purchasing them could care less whether they get bushel number one or bushel number two. Gold is another example of a commodity. 1 ounce of gold is the same as the next.
There are some differences in some commodities to external forces such as shipping costs or differences in composition. For example, not all oil sells for the same cost because they may come from different sources were shipping is a consideration. Also they may trade on different markets where the pricing is different.
There are two ways that commodities are traded, in spot markets, or as futures.
Spot markets, refer to trades that take place literally on the spot. The commodity is traded right then and there, usually for cash but also could be for some other product or good. For example, if you want to buy an ounce of silver, you can go right down to the jeweler give him some cash and it will give you so. This is spot trading.
Of course, spot trading can be done in larger volume as well. Some traders exchange millions of ounces of silver or thousands of barrels of oil and then sometime later the actual goods are delivered.
When traders talk about futures or options it is not the actual good that is traded for rather a contract to buy or sell that particular commodity for a particular price a certain date in the future. This is how most commodities trading is done. This type of trading can have huge profits and also huge losses as it involves speculating on the future which can be full of risk and uncertainty.
this type of trading has been around in its present form since the late 18th century . Around this time farming became more modernized which allowed commodity trading to be profitable. Although this is an age-old way of making money, the basics remain the same today as they were in the late 1700‘s.
For example, wheat takes many months to grow. So at the beginning of the planning, the market price when the wheat is ready and speculated on. So if a farmer plants meet in May which will be delivered in September, the price at that time may be four dollars a bushel. If in June the price begins to fall, and the farmer feels the price will continue following, he may offer a contract on this week for the current price (lower than $4.00). Now if someone thinks that the price will go up over four dollars, then this contract will look like a pretty good deal and they may take them up on it.
Since no one knows for sure what that price will be, an actual prices based on such unpredictable things such as weather, this whole process Is called speculation. so now when September rolls around, the farmer delivers his wheat for the agreed on price. Now if the price has actually gone up to over four dollars and the speculator has made a profit. But, if in fact, it is fallen to wander the agreed-upon price he has lost money.
So there you have it, the basics of commodity trading.
By: Lee Dobbins
About the Author:
Question #1: Housing prices down, oil prices down, commodities prices generally down … Further! With all the job losses, do you think labor costs are going to be rising? Then why is the Fed worried about inflation, to the extent that they slowly and incrementally and hesitantly drop the Fed Funds rate when we have a wholesale financial crisis going on? Are they worried about the price of lettuce?
Reference #1: NEW YORK (Reuters) – Oil fell 4 percent to below $57 a barrel on Wednesday as the U.S. government hacked its global demand growth forecast again due to the slumping global economy.
OPEC officials, concerned about the oil’s steep drop from record highs over $147 a barrel per day (bpd) in July, said the cartel could possibly decide by the end of the month to cut production again to raise prices.
U.S. crude fell $2.51 to $56.82 a barrel at 13:15 p.m. EST, after touching $56.35, the lowest since March 20, 2007. London Brent crude traded down $2.50 to $53.21 a barrel.
The U.S. Energy Information Administration chopped its 2009 output outlook by 740,000 bpd, with total demand expected to average 85.93 million bpd next year compared with estimates of 85.89 million bpd for this year.
Demand in the United States, the world’s biggest consumer of oil, was expected to fall by more than 1 million bpd for the first time since 1980 this year, the EIA said.
This trillion dollar bailout is nothing more than a ***** power grab by both sides in D.C. to attempt to nationalize the entire Financial Services Sector in this country.
For those of you who will attempt to “dis” my understanding of the economy, I will point out
1)I am self-employed, and won’t lose my job. My mortgage is fixed and very affordable. I don’t have any consumer debt to speak of. So, the bailout will not help me in any way, and it will, potentially damage me to the tune of thousands of dollars in taxes for God-only-knows how long
2)There is no way it stops here. If Washington succeeds in nationalizing the Financial Sector, Automotive, Retail and every other sector will have their hands out to get theirs, and we end up with complete Socialism.
3)My portfolio (and millions of other peoples) has only been negligibly affected by this correction. I would never invest in “air” which is what the Financial Services Sector is – my money is in commodities, transportation and agriculture – real things, that have intrinsic value….they are holding up pretty well. and
4) I remember the ‘87 market correction, which was roughly TWICE as sharp as this drop, IN ONE DAY, and the only thing done was to curb “program trading” (the abuse d’jour in those days), and within a year and a half the market not only recovered but began a long bull market.
This bailout is not necessary. period
Futures trading for plam oil, sunflower oil, soya oil, canola oil etc.
With the threat of recession looming large, GDP growth looking anemic and inflation is touching new height every fortnight, should you consider investing your hard earned cash into the stock market? Or more importantly, is trading a wise choice considering such a stormy climate? If you looking for a new way of investment, look no further than online commodity trading and you can earn rich rewards depending on your investment, knowledge, risk taking ability amongst other things.
How do you do commodity trading?
Simple, you choose any good online commodity trading software and start investing. Yes, it is really that simple. However, you must ensure that you are aware of the techniques, terminology etc involved in trading commodities. Today, online commodity trading is a convenient and easy way to reap profits from an industry that is fast becoming very appealing to almost everyone. With online commodity trading software you can not just watch how the commodities you have invested in grow, but also analyze new trends, devise strategies, amongst other features.
What commodities to invest in?
With food and crude prices touching an all time high, the current market sure may not look as attractive to an outsider, but ask the futures traders who find it a challenging task to make money when the going gets tough. So, if you invest in crude, oil, gas you can benefit from the skyrocketing prices that are expected to further intensify as the quest for newer oil sources gets impetus. So also, if you have heard of the latest food crisis, investing in agriculture stocks will help you make money as the price of food prices soar.
What Commodity companies can you consider investing in?
While there are many commodity leaders, there are some companies that show promise. Of course, you should only invest in them if you have done your own research and should never go on advice alone. For online commodity trading in agriculture, especially seeds etc, Monsanto is a world renowned leader. The company spends much time and effort in innovating ways for agrarians to increase their produce. And because food grain demand is on fire now, Monsanto is reaping rich dividends with this rise in demand.
Another company that manufactures chemicals and produces seeds for various food grains is Syngenta. With its innovative ways, Syngenta has managed to help farmers increase their crop yield. Also, the company is witnessing a tremendous growth in sales and annual earnings due to the rising prices of these commodities. Both Monsanto and Syngenta are good stock choices for a serious commodity trader.
What are the other commodity trading options?
After food, the next most favorite sector for commodity traders is energy. Alternate sources of energy are hot investments in a world driven by global warming threat. However, before you invest you must be completely sure of your choice and be able to back it up with analytical data. Also, Mosaic, Potash, Agrium are other companies witnessing an increasing interest leading to high gains in sales and earnings. These fertilizer companies will benefit from the rising prices of food.
By: Hayi Mansoor
About the Author:
would like info or reccomendations on established brokerage firms that I can invest through. I would like to start investing in futures.
US benefits from its ties from China and Japan over trade. Those countries don’t have a strong relationship with the U.S. because of suspicions that Americans harbor over their intentions of using the American govt. China though provides all the labor needed to produce the commodities that are sold back to the States. Our exported goods are priced at a higher rate when its dumped into the Chinese market. In China at least, General Motors cars are doing astonishingly well, in part because of a rising interest from the middle class to own ‘quality’ cars.
Israel, on the other hand, has historically done absolutely nothing for the US. They did not give us bailout money to continue funding our govt. They don’t share a strong economic relationship with our country yet they are seen as the US’s number one strategic ally. That to me is absurd beyond belief. There are no Chinese lobbyists influencing foreign policy at Washington but there are increasing numbers of Zionist groups asking for the US’s money and guns to support Israel. What does America get anything from Israel? If there was a sustaining reason why we support Israel then we should continue this relationship but I don’t see even one reason
scaredrys. that is a contradiction. Israel also has a HUGE human rights violation record. I admit that I don’t completely understand our ties w/ Israel but it seems obvious to me that they don’t benefit our govt in any way, if anything Israel is the country has has designs over the US
