Learn How to Trade in Corn Futures
By CornFuturesGo.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 – CornFuturesGo.com

Corn Futures Bull Market and Ethanol Demand
By MK Smith

The USDA recently came out with their estimates for corn ending stocks at .935 billion bushels which is 8% less than last year and an 11 year low. In fact the last time corn stockpiles were this low corn futures prices hit an all time high of over $5.00 per bushel. There is no guarantee that this same supply scenario will lead to all time high corn future prices again but massive amounts of new corn acreage will be necessary to keep up with the current demand and put a lid on rising corn futures prices.

Another consideration is the weakening US Dollar which makes American grains cheap to foreign buyers. There is more than a little talk by China and other Asian countries about reducing their amount of US Dollar holdings in favor of stronger currencies such as the Euro and the British Pound. This increased foreign buying power should lead to increased foreign demand and can also have an extremely bullish effect on corn futures prices over the near term.

Many analysts believe that crude oil futures prices must remain above $50 per barrel in order for ethanol production to remain profitable. Ethanol demand and usage is growing dramatically since the US government mandated its use instead of MTBE which was found to be poisonous to groundwater supplies and potentially harmful to humans. This mandate to use ethanol as a gasoline additive may also cut into the already tight corn supplies an help push corn futures prices higher.

There are two basic ways to speculate in the expectation of higher corn futures prices. Investors can purchase or go long corn futures contracts or purchase call options on corn futures. Many new investors choose purchasing call options on corn futures because of the finite risk aspect of purchasing options. Visit http://www.tkfutures.com/basics.htm to learn more about the mechanics of futures and options investments.

Before investing in corn futures or corn options investors must understand one basic truth. High profit potential investments such as corn futures and corn options carry with them a correspondingly high risk of loss potential. Investors in corn futures and options should only use risk capital because there is risk of loss in futures and options trading.

Visit http://www.tkfutures.com/risk_disclosure.htm to learn more about the risks of commodity investing.

The author is a 13 year veteran of the commodity trading markets and the owner of a commodity trading company.

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