Corn, Oil and Soybean Prices
By Paul A. Ebeling, Jnr. | November 22, 2012 7:40 PM EST
Commodities: Crude Oil closes higher on the day
Commodities displayed some notable volatility today, especially in the Crude Oil market.
Inventory data came out for Oil and for Nat Gas today. Crude Oil data did not cause the commodity to do much initially, but sellers stepped in later, cause the Dec contract to fall below the 86.50 mark.
Crude Oil recovered those losses with an afternoon rally, to end the day 0.7% higher at $87.41 bbl.
Nat Gas futures rose following inventory, which pushed the Dec contract as high as 3.91. At the end of today’s floor trading session, Nat Gas closed + 2.3% at 3.91/MMBtu.
Precious metals ended the day higher, while Copper finished a bit lower. In morning action, Gold and Silver rallied higher, allowing Dec Gold to ended the day + 0.3% at 1723.70 oz and Dec Silver up 1% at 33.29. Dec Copper lost 0.02 to finish at 3.50 lb
Commodities: Put Option strategies buffer more price declines in Corn and Soybean
With Corn and Soybean prices down sharply from drought-driven record highs reached last Summer and holding “significant” risk for further declines, grain farmers should consider hedging their Y 2013 crops earlier than normal, analysts at The Hightower Report said.
Corn futures for delivery in Dec 2013, currently around 6.23 bu are more than 1.00 below nearby contracts.
The situation is similar for Nov 2013 soybean. Those “new-crop” prices offer historically high returns that could be endangered by weak global economies or other factors.
“Our studies show that Corn producers might make more money with December 2013 Corn priced 6.15 than with the old-crop priced at$7.32, if it means they are achieving better yields,” analysts with The Hightower Report wrote in a new report.
“We would strongly encourage corn producers to consider any type of hedging strategy that protects at least some of the high profitability potential for the 2013 crop year,” they said. Leveraged put option strategies, for example, “can actually increase effective prices in years of down.
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Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.