USDA recently came out with its estimates for corn stocks end up, 935 million barrels, which is 8% less than last year and a 11-year low. In fact, the stocks of grain were last this low wheat futures hit a historic high of more than $ 5.00 per bushel. There is no guarantee that the same scenario in demand will result in all future time high prices of grain again, but the massive amount of space for new grain would be needed to keep pace with current demand and put a lid on rising cornfutures contracts.
Another reason is the weakness of the dollar so cheap American grain to foreign buyers. There is more than a little 'talk with China and other Asian countries to reduce the amount of U.S. dollar sector for the benefit of a strong currency like the euro and the pound sterling. This increased purchasing power of foreigners would lead to an increase in foreign demand, and also a very offensive on wheat futures contracts in the short term has a whole.
Many analystsbelieves that the contracts of crude futures would be more than $ 50 a barrel, for ethanol to remain profitable. The demand for ethanol and the use increases dramatically when the mandate of the United States government for its use in place of MTBE, which was found to be toxic to groundwater and potentially harmful to humans. This mandate to use ethanol as a gasoline additive may also cut into already tight supplies of wheat to help push the corn futures prices higher.
There are two basic waysspeculate waiting for a higher wheat futures contracts. Investors can buy or go long corn futures or buy call options on wheat futures. Many new investors choose to buy call options on wheat futures due to the limited size of the risk of purchase options. Http: / / www.tkfutures.com / basics.htm Visit to learn more about the mechanisms of futures and options investments.
Before investing in corn or wheat futures options investors a simple truth must be understood. Highinvestment profit potential, such as futures and options on wheat grain consequently carry a high risk of potential loss. Investors in futures and options, grain should only use risk capital because there is no risk of loss in futures and options traded.