Soybean Futures are Up On News of South

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Soybean Futures are Up On News of South -
Last year’s torrential rains across Latin America are over and things have dried out, a little too much. For commodity traders the most recent news is that soybean futures are up on news of South American drought. The combination of high global demand for food, the prospect of diminished production capacity, and futures trading make for profit potential. Traders may simply but futures contacts so soybean futures are up on news of South American drought. More cautious traders may trade options on soybean futures, hedging investment risk while still taking advantage of the leverage that options trading offers. A big part of how to trade commodities is fundamental analysis of weather trends as well as global supply figures. However, when the market starts to move, other speculators buy and sell futures with the intent of making a profit. As often as not futures prices can overshoot price targets that fundamentals might predict. As such traders always need to keep an eye on market sentiment.
Global Demand for Food
The population of the world is growing. And, many previously poor nations are becoming wealthy and eating better. A recent news item noted that bikini sizes in Brazil are getting larger as the lithe young girl from Ipanema has filled out due to an abundant supply of calories. All of this leads to a higher global demand for food. These factors are demographic and strong. Trading with this information in mind is not trying to outguess the market. The only questions are how much and how soon.
Diminished Production Capacity
As urban areas grow, previously productive farm land gets covered up with suburbs, concrete shopping center parking lots, and highways. And there is always the weather. This last year was historic with flooding across much of South America. And then the rains stopped and the dry season, South American summer, arrived. There has been no rain in some areas for months, just as crops should be ripening. Yields will likely be down across much of Brazil and Argentina. This situation is not as urgent as what was caused by the recent draught in Eurasia but sufficient to for us to see soybean futures rise on news of South American drought. This is similar to trading a disaster such as the Japanese tsunami or a hurricane in the Gulf of Mexico, except that a drought develops slower that than the arrival of a hurricane or tsunami wave.
Futures Trading
Futures trading allows producers and buyers of grains, meats, and other commodities to hedge investment risk. It allows speculators to profit from careful analysis of fundamentals and astute technical analysis of market sentiment.

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Soybean Futures are Up On News of South

  1. 1. Soybean Futures are up on News of South American Drought www.ProfitableTradingTips.com
  2. 2. To see a complete version of this presentation and to obtain our free EBook follow this link:http://portal.sliderocket.com/BLOUC/Soybean-Futures-are- up-on-News-of-South Read the Forex Conspiracy Report for insights into trading foreign currencies. Get your copy athttp://portal.sliderocket.com/BLOUC/Soybean-Futures-are- up-on-News-of-South www.ProfitableTradingTips.com
  3. 3. Last year’s torrential rains across Latin America are over and things have dried out, a little too much. www.ProfitableTradingTips.com
  4. 4. For commodity traders the most recent news is thatsoybean futures are up on news of South American drought. www.ProfitableTradingTips.com
  5. 5. The combination of high global demand forfood, the prospect of diminished productioncapacity, and futures trading make for profit potential. www.ProfitableTradingTips.com
  6. 6. Traders may simply but futures contacts so soybeanfutures are up on news of South American drought. www.ProfitableTradingTips.com
  7. 7. More cautious traders may trade options onsoybean futures, hedging investment risk while still taking advantage of the leverage that options trading offers. www.ProfitableTradingTips.com
  8. 8. A big part of how to trade commodities isfundamental analysis of weather trends as well as global supply figures. However, when the market starts to move, otherspeculators buy and sell futures with the intent of making a profit. www.ProfitableTradingTips.com
  9. 9. As often as not futures prices can overshoot price targets that fundamentals might predict. As such traders always need to keep an eye on market sentiment. www.ProfitableTradingTips.com
  10. 10. Global Demand for FoodThe population of the world is growing. And, manypreviously poor nations are becoming wealthy and eating better. www.ProfitableTradingTips.com
  11. 11. A recent news item noted that bikini sizes in Brazil are getting larger as the lithe young girl fromIpanema has filled out due to an abundant supply of calories. www.ProfitableTradingTips.com
  12. 12. All of this leads to a higher global demand for food. These factors are demographic and strong. www.ProfitableTradingTips.com
  13. 13. Trading the fact that soybean futures are up onnews of South American drought is not trying tooutguess the market. The only questions are how much and how soon. www.ProfitableTradingTips.com
  14. 14. Diminished Production CapacityAs urban areas grow, previously productive farm land gets covered up with suburbs, concrete shopping center parking lots, and highways. www.ProfitableTradingTips.com
  15. 15. And there is always the weather. This last year was historic with flooding across much of South America. And then the rains stopped and the dry season, South American summer, arrived. www.ProfitableTradingTips.com
  16. 16. There has been no rain in some areas formonths, just as crops should be ripening. www.ProfitableTradingTips.com
  17. 17. Yields will likely be down across much of Brazil and Argentina. This situation is not as urgent as what was caused by the recent draught in Eurasia butsufficient to for the fact that soybean futures are up on news of South American drought. www.ProfitableTradingTips.com
  18. 18. This is similar to trading a disaster such as the Japanese tsunami or a hurricane in the Gulf ofMexico, except that a drought develops slower that than the arrival of a hurricane or tsunami wave. www.ProfitableTradingTips.com
  19. 19. Futures TradingFutures trading allows producers and buyers ofgrains, meats, and other commodities to hedge investment risk. www.ProfitableTradingTips.com
  20. 20. It allows speculators to profit from careful analysis of fundamentals and astute technical analysis of market sentiment. www.ProfitableTradingTips.com
  21. 21. Although many futures traders simply buy or sell futures contracts in order to guarantee a futureprice many choose to purchase options in order tomaintain the choice as to whether or not they will want to buy or sell a given futures contract. www.ProfitableTradingTips.com
  22. 22. For the fact that soybean futures are up on news of South American drought could be reversed overnight with the prediction of timely rains in South America. www.ProfitableTradingTips.com
  23. 23. The advantages of options trading are that the buyer of an options contract limits his risk to theprice of the contract and that he can profit from the often substantial leverage that buying a cheap options contract provides when there is an otherwise unexpected swing in commodity prices. www.ProfitableTradingTips.com
  24. 24. For more insights and useful information regarding stock, options, commodities, and futures trading visit www.ProfitableTradingTips.com.

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