Trader,
I've wanted to do a posting about this for quite a while, but haven't had the chance...until now!
What's driving up the price of Wheat and Crude Oil??
Is it SUV's? Could it be that Americans HATE bread? Are there enough barrels of oil?
Well it could be any of those things, but one thing in particular has been a BIG contributing factor...Bio Fuel Mandates.
The reality is Corn, the key ingredient in ethanol, is more profitable for the farmers to farm due to the heavy subsidization. Therefore the price of Wheat is going up, up, up because the supply is going down, down, down...it's simple economics yes...but how do we profit from it??
The chart above shows exactly how...Get LONG on the GREEN and EXIT on the RED. The above chart screen capture was taken at 1pm est live, so this could continue to go higher and continue with the profits...or it could hit a stop and lock in your profits in that trade.
So how do Government Mandates affect Crude Oil?
I don't have enough space to write about it all!!! But I do have room to tell you how to profit from it:
The chart above shows exactly how...Get LONG on the GREEN and EXIT on the RED. The above chart screen capture was taken at 1pm est live, so this could continue to go higher and continue with the profits...or it could hit a stop and lock in your profits in that trade.
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**Your Feedback**
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What I'm doing is keeping records of NEW and OLD Government Mandates and how they can/will effect the trading markets both Futures and Stock related for a future blog posting. So if you know of any mandates, and you're curious how they can/will effect your markets, post a comment to this posting and I'll get to work on it.
What is a Government Mandate, Brad?
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Mark,
A Government Mandate is a provision of federal law that imposes requirements on state or local governments while providing funds for implementation. The funding comes from tax payers and is meant to improve situations based off the Governments thinking.
Hope that helps,
Brad
Can you put these mutuals fund in your signal? GTVLX JABRX TRSAX OPMSX NAESX SYNO NUBV
Long Lee,
Thanks for writing in!!
To answer your question, we DO cover ALL the before mentioned Mutual Funds. Simply Join MarketClub and plug in the symbol and our search tool will automatically bring up the matches!
Best,
Brad
I hate to burst your preconcieved bubble, but wheat acres were higher for all but one class of wheat last year(spring wheat). Wheat ending stocks have been declining for the last 3 years. The reasons for high wheat prices are world weather problems in all of the major wheat growing areas coupled with some unusual price actions which suggest someone with deep pockets got caught short in the wheat market and is paying a heavy price. The low $US has made our commodities cheaper on the world market, especially as inflation pushes our prices higher. You can blame ethanol for every ill under the sun, but that doesn't mean its true.