http://profitabletradingtips.com/trading-investing/soybean-futures-are-up-on-news-of-south-american-drought - 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.

1. Soybean Futures are up on News of
South American Drought
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up-on-News-of-South
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3. Last year’s torrential rains across Latin America are
over and things have dried out, a little too much.
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4. For commodity traders the most recent news is that
soybean futures are up on news of South American
drought.
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5. The combination of high global demand for
food, the prospect of diminished production
capacity, and futures trading make for profit
potential.
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6. Traders may simply but futures contacts so soybean
futures are up on news of South American drought.
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7. More cautious traders may trade options on
soybean futures, hedging investment risk while still
taking advantage of the leverage that options
trading offers.
www.ProfitableTradingTips.com

8. 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.
www.ProfitableTradingTips.com

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. Global Demand for Food
The population of the world is growing. And, many
previously poor nations are becoming wealthy and
eating better.
www.ProfitableTradingTips.com

11. 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.
www.ProfitableTradingTips.com

12. All of this leads to a higher global demand for food.
These factors are demographic and strong.
www.ProfitableTradingTips.com

13. Trading the fact that soybean futures are up on
news of South American drought is not trying to
outguess the market. The only questions are how
much and how soon.
www.ProfitableTradingTips.com

14. Diminished Production Capacity
As urban areas grow, previously productive farm
land gets covered up with suburbs, concrete
shopping center parking lots, and highways.
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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.
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16. There has been no rain in some areas for
months, just as crops should be ripening.
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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 but
sufficient to for the fact that soybean futures are up
on news of South American drought.
www.ProfitableTradingTips.com

18. 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.
www.ProfitableTradingTips.com

19. Futures Trading
Futures trading allows producers and buyers of
grains, meats, and other commodities to hedge
investment risk.
www.ProfitableTradingTips.com

20. It allows speculators to profit from careful analysis
of fundamentals and astute technical analysis of
market sentiment.
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21. Although many futures traders simply buy or sell
futures contracts in order to guarantee a future
price many choose to purchase options in order to
maintain the choice as to whether or not they will
want to buy or sell a given futures contract.
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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.
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23. The advantages of options trading are that the
buyer of an options contract limits his risk to the
price 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.
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24. For more insights and useful information regarding
stock, options, commodities, and futures trading
visit www.ProfitableTradingTips.com.