How are funds impacting grain markets right now?
Kim Anderson, Oklahoma State University Extension grain marketing specialist, says watching fund movement should be a priority for farmers.
He says there are several different kinds of funds, but they can mostly be grouped into three different categories:
- Index: This type of fund is always in commodities. It only trades net long.
- Managed: These funds can shift between groups.
- Swap: The swap funds allow for an exchange of stocks and trade only in the futures markets and internal trading.
Anderson says funds have been part of the market for almost the last decade, but began majorly influencing the markets in 2006.
Even with the funds playing a large part in the markets, he says it should drastically change how you market your crop.
“Concentrate on producing a quality product, managing my finances and managing my crop,” he says.
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