The following commentary does not necessarily reflect the views of AgWeb or Farm Journal Media. The opinions expressed below are the author's own.
Grain TV is a daily recap after the market close, providing opinions on fundamental analysis of market direction, influences and expectations. This daily program is produced by Grain Hedge, a discount brokerage firm that provides farmers and elevators with agricultural intelligence including live market quotes, cash bid data, the Grain Hedge Optimizer™ and mobile trading platforms, all for $7 commission per side. Grain Hedge provides tools to allow farmers the ability to trade when the markets move without having to wait for a broker and the information to execute a marketing strategy with confidence.
This afternoon's COT Report showed managed money heavily invested in corn spreads, with nearly double the positions of both the "swap dealer" and "other reportable" portion. You can see from the chart below that spread trading among the funds has increased two-fold since August, and this week's COT report showed they are adding on new spread positions at an increasing rate.
Intra-commodity spreads, especially the old crop / new crop corn spread seem to be a hot topic right now, so it is not surprising to see this explosion in fund spreading. With this large quantity of managed money spreads in the market, traders should keep in mind what will happen to these spreads when funds "un-wind" their positions.
If you are a producer who would like to chart or trade these spreads using live quotes in your home today, take a demo of the Firetip trading platform!
THERE IS A RISK OF LOSS IN TRADING FUTURES AND OPTIONS. FUTURES TRADING IS NOT APPROPRIATE FOR ALL INVESTORS.
PLEASE READ OUR RISK DISCLOSURE.
No comments have been posted to this Blog Post