Commodities Futures Trader

Brazil is a huge country with plenty to offer in the fields of commodities, commerce, and vacations, no matter a persons individual preferences. In fact, there are so many things to do in Brazil, many tourists will return for a second or third visit and businessmen want to camp out there.

Brazil is to commodities what China is to manufactured goods. A large share of the world’s beef, orange juice, soybeans and iron ore comes from the great green giant. With the recent discovery of two huge oil fields off the coast of Brazil, the most important oil field finds in the world in decades, Brazil is set to advance fast in an energy short world. The Brazilian oil firm, Petrobras, is an expert in developing deep water fields as these fields are.

Commodity prices have in many cases reached new record high levels over the past year. In spite of high prices the long term trend is still up and likely will be for a long time to come.

Commodity prices are volatile because they respond to many unpredictable factors. Weather, labor strikes, inflation, foreign exchange rates, government monetary policies, and well intentioned but flawed government programs, like the US ethanol production program, all have their part to play in the pricing of commodities on open markets.

The commodities futures market has been described as continuous auction markets. It is a clearinghouse for information about supply and demand. The futures market reflects the cash market.

The difference between futures prices and cash prices at any moment is called the basis. Compared to the stock market the futures markets are exceptionally prone to false breakouts and trends have wilder swings, tempting traders to leave early or enter late, possibly with a loss. Just have a look at commodity futures charts, and compare them with stock market charts. The difference in trading pattern will be apparent.

Commodity futures trading is an on going battle between return and risk. Because of the high amount of leverage involved, you can achieve a higher rate of return than from most other forms of investment, but at a higher risk. Commodity trading is speculative, involves a high degree of risk, and is designed only for sophisticated investors who are able to bear the loss of more than their entire investment.

The Chairman of the US Federal Reserve Bank, Ben Bernanke, rings the forex market bell at a speech he made yesterday at an economic conference in Barcelona Spain. Helicopter Ben said the following:

“In collaboration with our colleagues at the Treasury, we continue to carefully monitor developments in foreign exchange markets. The challenges that our economy has faced over the past year or so have generated some downward pressures on the foreign exchange value of the dollar, which have contributed to the unwelcome rise in import prices and consumer price inflation. We are attentive to the implications of changes in the value of the dollar for inflation and inflation expectations and will continue to formulate policy to guard against risks to both parts of our dual mandate, including the risk of erosion in longer-term inflation expectations.

Jim Rogers is a multi-multi millionaire, outstanding investment market forecaster, and visionary of the future. Who could argue with this man?

Here is Jim Rogers on Dubai. “Dubai doesn’t have much oil, you can see this from doing your homework, Dubai will be out of oil in five years or something. Dubai is doing their best to become a center for the Middle East: for shopping, for finance, for technology, for everything else, because they are running out of oil.”

Commodity trading is a battle between return and risk. Because of the leverage involved, you can achieve a higher rate of return than from most other forms of investment, but at a higher risk. Commodity trading is speculative, involves a high degree of risk, and is designed only for sophisticated investors who are able to bear the loss of more than their entire investment.

You should keep in mind that past performance is not necessarily indicative of future performance. Commodity trading is just one step in solving the complex agriculture problems. Interestingly the concept of futures trading started from farming when a French wine merchant started locking prices for his wine produce even before his grapes were ready.

The Chairman of the US Federal Reserve Bank, Ben Bernanke, rings the forex and commodity market bell during a speech he made yesterday by satellite TV to an economic conference in Barcelona Spain. Helicopter Ben finally spoke out about the sad condition of the US Dollar and it’s contribution to a higher US inflation rate and said the following: