| Shipping chief denies key role in collapse of dry bulk rates
One of the most controversial figures in world shipping markets has denied playing a pivotal role in the past few weeks' decline of dry bulk shipping rates, saying it resulted from fundamental market changes. Nobu Su, whose privately held Taiwan Maritime Transport is the largest participant in shipping futures markets, responded to the suggestion through a London-based spokesman. .
What Now?
It's an easy short against the dollar. You can also short sterling against the euro or the Swiss franc. Over the longer term, when the interest-rate differential between the U.S. and the U.K. in real terms has been less than 1% to the advantage of sterling, sterling always has weakened against the euro. Now it is at 70 basis points in real terms. [A basis point is one one-hundredth of a percentage point.] You can sell sterling short against the dollar in the futures market. Faber: It may be easier to short a British-pound ETF, CurrencyShares British Pound Sterling Trust [FXB]. Zulauf: On the long side, Fred already talked about gold [in last week's Roundtable installment]. I have recommended it several times over the years. Now it's $850 per ounce. The most important thing driving the price of gold is low real interest rates.
Pork producers have opportunities to lock-in profits
With feed prices high and headed higher, pork producers may continue to see losses at least through the first quarter of 2008. That's according to USDA's Livestock, Dairy and Poultry Outlook, which the Agency released Friday. But a noted hog marketing expert says the futures market is providing opportunities for pork producers to avoid red ink next year.
The USDA report said for the first quarter of 2008, hog prices are expected to average between $38 and $40 dollars a hundredweight, more than 15% below a year ago. USDA estimated production costs in the low-to-mid $50's per hundredweight and also said most hog producers are likely to lose money in 2008. But University of Missouri livestock economist Glenn Grimes told Brownfield taking advantage of strength in lean hog futures at the Chicago Mercantile Exchange (CME) may help pork producers avoid that prediction.
Shipping in favour as industry proves resilient
With all the “stormy weather" metaphors floating around the markets at the moment, you might think the last thing to do with your money is send it to sea, but some investors have done precisely that and have been richly rewarded. Out of favour in the 1990s, shipping is now attracting more interest as demand soars and the financial infrastructure supporting the industry becomes more sophisticated. There is a variety of approaches available to investors, although the choice of different funds within each approach is limited. The options include investing directly in ships as assets, managing the ships and their freight, buying shipping company shares or investing in the increasingly active futures market. .
Derek Frey's Outlook
Derek Frey, Head Trader at Odom & Frey Futures Options and FOREX, will walk you through his weekly FOREX newsletter and offer you extensive insight into how, where, and why he feels the currency markets will move for the week ahead. The great part about this is, it is an open session in which he will answer any and all market related questions, giving you the chance to pick the brain of an experienced trader.Derek has been trading for over 15 years and specializes in Options. He has been a regular contributor here at FXstreet.com since 2004.Join him free and find out why traders around the world listen to his opinion every week. Who is Derek Frey? Derek Frey has been a futures trader since 1989 and is Head Trader and partner at Odom & Frey Futures & Options, a firm that specializes in high probability, defined risk option spread trades for the futures markets.
Major grain merchandiser does away with HTAs
DTN Markets Blogger Pat Hill reports Thursday that the Andersons will no longer write hedge-to-arrive contracts for grain for delivery after August of 2008.
Hedge-to-arrive contracts are forward contracts that don't set the basis until a later date. When basis is wide, that's often a good deal for ag producers. But given the increasingly speculative nature of futures markets, it's become harder and harder for grain merchandisers to hedge that basis risk.
According to the DTN story, there aren't any other major grain firms that have sworn off on hedge-to-arrive contracts yet. But some have reportedly increased fees for those contracts.
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Little liquidity pours cold water on plan
It's a common question in financial circles. It's why those with plenty of cash can swoop in and profit on sure-things that really are sure-things, like Google. It's why many of us will never qualify to own an Outback Steakhouse franchise. And it's why there's a limit on the profit I'll eke out of the Iowa Electronic Markets. Or so I thought. Of the $500 I invested in the IEM, a presidential futures market that works like a real stock market, I have just 24.7 cents in cash. Not even enough to play a game of Ms. Pac-Man, or to tumble dry my socks. Everything else is tied up in investments, and that makes it terribly difficult to pounce when a presidential Google appears. But a thread of logic winnowed its way through my needlepoint investing brain Tuesday morning.
Cost of corn pinches plants
High corn prices have created a cash-flow problem for a South Dakota ethanol plant.
Poet Biorefining in Chancellor has borrowed $6.3 million from its partner, Poet, in response to an increase in the price of corn futures that shows little sign of abating.
On Jan. 14, the Chancellor ethanol company and Poet agreed to a short-term loan to be repaid Feb. 13, including interest at an annual rate of 9.25 percent. According to a filing with the Securities and Exchange Commission, the money was needed to cover margin calls triggered by a price increase in the corn futures market at the Chicago Board of Trade. "We did not have the necessary funds from operations to cover the margin calls," General Manager Rick Serie wrote in the filing.
The plant, which produced about 51 million gallons of ethanol last year, was securing grain with plans to distill 100 million gallons this year.
MCX to support Microsoft's rural technology training programme
MUMBAI: Multi Commodity Exchange of India on Thursday announced its support to an ongoing computer literacy programme of Microsoft and Indian Society of Agribusiness Professionals in rural Maharashtra.
This marks the launch of MCX's Corporate Social Responsibility initiative aimed at empowering the youth and women of rural areas of the state with technology skills.
Till now over 15,500 people have been trained and more than 24,000 people are using this service across 16 districts by the means of understanding the futures markets prices of the area specific commodities.
MCX's support will help in increasing deployment of laptop and desktop computers and thereby strengthen the ongoing technology training and adoption efforts through the project.
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