Learn How to Trade in Corn Futures

Learn How to Trade in Corn Futures
by Helpnets.com

The stock market is a place where an investor can either make a lot of money or a little depending on how well he or she places their investments. The futures market in particular can be extremely high risk but the rewards reflect this risk also. By learning to trade in corn futures and other commodities, you can reap a high reward and find ways to lower your risk at the same time.

The quickest way to enter the futures market is by going online and doing some research. Corn futures in particular have a way of changing in price from day to day depending on the supply and demand. The Internet is a great way to keep up with these changes and allows the smart investor to track their movements with little to no effort.

There are many websites available that allows for the purchasing and tracking of corn futures and other commodities. These can be an invaluable tool for the investor that would like to do this without the use of a broker. By purchasing stocks in this fashion, the brokerage fees are cut out and all the profit goes directly to the investor.

Trading in corn futures however is one of the higher risk investments available today. You may lower your initial risk by utilizing a few different methods. These other methods both require the use of a broker, but this allows for a lower risk to your capital along with the knowledge that you have a professional giving you advice.

The first method to minimizing your risk would be to open a managed account. With this type of account, the broker would make the purchasing decisions for you using your capital to buy the futures. The advantage to this is the knowledge the broker brings to you in the trends in the market along with what is a smart move or not.

The second method would be to enter into a commodity pool. This is the lowest risk way to trade in corn futures as the overall investment is added to others and therefore if a loss is taken, that loss is divided among a few people rather than just you as a single investor taking the brunt. The commodity pool also allows for diversification into other areas of commodity trading.

By going online and doing some research, many websites may be found detailing trading methods and the proper way to invest. These websites all contain valuable tracking information in regards to trends in the commodities market and overall pricing guides for past years. They will also show projections for the upcoming year as the area of investing that is being looked in to be after all, the “futures” market.

These websites are one way the do it yourself investor can gain the same knowledge as the brokers that operate from an office. They utilize the same numbers and trending patterns to make their decisions and the Internet allows you to take advantage of this. Many of these websites also offer very low priced trades and are perfect for the part time investor or the full time day trader.

Copyright 2010 – Helpnets.com

June 3, 2010  Tags: Corn Futures  Posted in: Corn Futures  Comments Closed

The Corn Crop And Corn Futures

The Corn Crop And Corn Futures
by Helpnets.com

Corn has been around since prehistoric times, although our images seem to go to that of Thanksgiving and Pilgrims receiving it as a gift from the Indians. The date of that exchange is often disputed, but the gift exchanged is not, just as we cannot dispute the value of corn. The following will explain the corn crop and corn futures.

There are over three hundred million metric tons of maize grown in the United States annually. It is also the most largely grown crop in the Americas. Transgenic Maize makes up approximately eighty percent of the type of corn that is grown in the US. It is a type of hybrid that is resistant to pests and herbicides. The BT gene is responsible for its ability to be resistant to pests, and has been used as a substitute for pesticides. The US and five other countries are currently producing Transgenic Maize, they include Germany, Portugal, South Africa, Spain, and the Czech Republic.

Corn being grown in large quantities is a good way for farmers to be able to keep their livestock fed, aside from sales for human consumption. It is both nutritional for their animals and good for their digestion.

One of the most delicious and least publicized vegetables is sweet corn. Other vegetables seem to get all the attention for their nutritional value, however, corn contains, vitamin C, fiber, thiamine, niacin, folate, protein, and carbohydrates. It really deserves a little more credit. There are many wonderful dishes that can be made using corn, and some are made with corn as the main ingredient.

Unfortunately, a good vegetable seems to have gotten a bad rap, due to high fructose corn syrup that we use to sweeten products. It is a good sweetener, and it has not been proven to have any ill effects when eaten in moderation. The point here is, if you eat everything in moderation, there is no problem. A sugar diet will have ill effects on your weight and health. Even a diet of one particular vegetable is not a healthy diet.

Corn is now being used for more than just food. Farmers are able to grow much more of it in smaller amounts of space and this is extremely good for our fuel futures. A product called ethanol, which is a clean burning fuel can be produced from corn. The idea actually came from the moonshine that was once made from corn so many years ago.

We have many stores of crude oil that are still available to us, and this delays the advancement of ethanol production. When you think about feeding people as opposed to producing fuel, then the need to feed will always come first. So, at least for now, fossil fuels are still being used. Farmers are looking like they hold our futures with the corn crop and corn futures.

Copyright 2010 – Helpnets.com

June 2, 2010  Tags: Corn Futures  Posted in: Corn Futures  Comments Closed

How to Make a Killing in Corn Futures

How to Make a Killing in Corn Futures
By Brian T Mikes

In Friday’s article we discussed the poor state of the ethanol industry. We also touched on how the industry’s being impacted by rising corn prices. Corn, it seems, is becoming a mini celebrity. Everyone’s been watching prices move to new highs. And everyone’s riding the corn bandwagon.

Farmers are celebrating the high prices. Speculators and traders are jumping into the markets looking for fast money. Environmentalists are still trying to decide if ethanol from corn is “good” or “bad.” Government officials are even getting in on the debate as they get to complain about food inflation.

Now, you don’t need me to tell you how important corn is. It’s one of the most important food products in the United States and for a significant part of the world. Corn is the largest crop in the US. We produce about 170 million metric tons annually – almost half of the world’s total production.

A little background.

Corn was first domesticated around 9,000 years ago in Central Mexico. Its use spread throughout the Americas, and continued on to Europe in the 16th century. The corn we traditionally think of – the kind we eat at BBQs and picnics – is known as sweet corn. Popping corn is another genetic variety.

Amazingly, the corn you and I consume is just a tiny percentage of the total crop. The vast majority of corn production is of the dent and flint varieties. Dent and flint corn is used either as animal feed or for industrial products.

According to the US Department of Agriculture, almost 70% of corn is used as feed for animals. Corn can also be processed into other useful products like corn starch, corn syrup and ethanol.

Corn is a picky crop.

Planting conditions need to be just right. As a matter of fact, right now market speculators are spending more time watching the weather channel than CNBC. This year rains are delaying planting schedules. The longer it takes to get the seeds into the ground the lower crop yields will be.

Making money on corn – futures or options?

Corn trades primarily on the Chicago Board of Trade where investors, speculators, and industry participants can buy and sell futures. For those of you who don’t know, there is a big difference between a future and an option.

Both futures and options allow you to use leverage. And both can provide big profits. With an option you own a right but not the obligation to complete a trade. This means if you bought an option on settlement day it’s your decision to complete the transaction.

A future is different. If you own a future on settlement day you have an obligation to settle the transaction. If you own a Corn future, you might find yourself the proud owner of 5,000 bushels.

Now with any trade it’s important to know what you’re buying. One contract of corn represents 5,000 bushels. Just so you have an idea, each bushel is about 56 pounds (husks and cobs are removed). Corn trades by the quarter cent which is $12.50 per contract. So a penny move in the price of corn moves the value of a contract up or down by $50.

Some investors don’t know this, but the exchange limits how much corn prices can move. These limit levels prevent prices from getting out of hand when important news or events occur. For corn the maximum move is 20 cents. So when prices move by $0.20 in a day, all trading stops. If you want to trade you will need to wait for the next day.

Futures trading can be complicated.

If you still want to invest in corn, but don’t want to use options or futures, there’s an easier way. A number of Agricultural ETFs have been created. They track the movements of a variety of commodities. One is the PowerShares DB Agriculture Fund (DBA). This fund holds a basket of commodities including Wheat, Soybeans, and Sugar. More than 24% of the fund is invested in Corn. So if you’re looking for a safer way to invest in corn, this ETF might be a good choice.

Brian Mikes is the editor of the Dynamic Wealth Report, a free investment newsletter that offers investment ideas and news you can’t get from the mainstream investment press. Brian and his team bring decades of Wall Street and Silicon Valley experience to help you discover profitable trading ideas you can use today.

In addition to corn trade ideas, you’ll also receive FREE updates on penny stocks, options, ETFs, commodities and currencies that offer the best opportunity for immediate profit. Click here to start your free subscription today: http://www.DynamicWealthReport.com/new.htm

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May 21, 2010  Tags: Corn Futures  Posted in: Corn Futures  Comments Closed

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