Funds Eye Poor-Performer Wheat In Hunt For Laggards

“Our discretionary managers… are long wheat because in an absolute sense it’s been extremely beaten up.” – ALEX ALLEN, EDDINGTON CAPITAL MANAGEMENT Wheat has been the poor cousin of commodities this year, losing value as star performers such as copper, lead and sugar have flown, but the humble grain is now beginning to catch the

Taking The Edge Off With Futures And Options

“I pounded my head against the wall. When you say those words – ‘I think,’ ‘I hope,’ or ‘It’s gotta go higher’ – you’re speculating.” – TOM CLARK, CME There are a few surefire ways to avoid the unpredictable nature of commodity markets. One way out of the lowest-price-is-the-law trap is to direct market all


Frustrated Chicago Wheat Traders Seen Testing MGE

Frustrated wheat traders who say the Chicago Board of Trade Soft Red Winter wheat contract is no longer an effective hedging tool appear to be testing the waters in a new market – the Minneapolis Grain Exchange. Open interest in the MGE’s long-dormant, cash-settled Soft Red Winter Wheat Index futures has exploded over the last

Using Stepping Stones In The Landscape

The depth of the stones can be adjusted by adding soil or sand to the holes until the correct depth is reached. Gardens can have many landscape features, but I think one of the most enchanting is a garden path. Although we all have walkways from driveways to the front door, and sidewalks that take


CBOT Says It Is Still The Global Benchmark

Chicago Board of Trade, the world’s largest grain exchange, has no fear of its wheat contract being challenged as the global benchmark for prices by an upstart from Australia, a senior official told Reuters. Australia’s stock exchange operator, ASX Ltd., plans for its Hard wheat export futures contract to begin trading in May, opening up

Grain Swaps Offer Hedgers Brave New World

Ready or not, here they come. After years of planning, the Chicago Board of Trade has introduced a new hedging tool for the world grain industry that differs significantly from its century-old futures markets, but promises to take the risk management game to a new level – once everyone gets on board. “So far my


CBOT’s New Limits On Non-Grain Players Approved

The Chicago Board of Trade (CBOT) on Feb. 13 received U. S. government approval to limit cash grain delivery instruments held by non-grain firms – its latest move to cool criticism about the performance its grain contracts. CBOT’s regulator, the Commodity Futures Trading Commission (CFTC), approved an amended Feb. 9 request to reduce the large

Will A World Wheat Contract Replace CBOT Futures?

“The market is going to take care of itself, the banking system will be back in order, the risk management of the grain companies will be back in order, and everybody is not going to be terrified.” – GLENN HOLLANDER Is the grain industry ready for a world wheat futures contract? A year-long campaign to


Pioneer Hi-Bred launches U. S. hedging service

In a bid to extend its reach into the U. S. grain industry, DuPont said Nov. 13 it will launch an electronic instant hedging and cash grain commodity transaction service. The “e-Pit” program, a joint project by DuPont’s Pioneer Hi-Bred business unit and Farms Technology LLC, partly owned by Pioneer, is aimed at speeding a

Crisis remakes the commodity business

Only the brave or the foolish would make predictions about the future amid the biggest market upheaval in three generations. But it is already clear the crisis is profoundly reshaping the commodity trading industry. The mix of intermediaries, customers and financial resources are all being substantially redrawn. So here are some tentative thoughts on how