In the world of commodity trading, timely, accurate information is crucial. So where do merchants get their information on price, analysis, outlook and strategies?
“Every day we get so much to read,” says Elizabeth Armstrong, commodity trader for London Agricultural Commodities (LAC) in southwestern Ontario. “I breeze through 25 or 30 online newsletters every morning.”
It’s hardly cloak-and-dagger stuff. When the markets are open, so are the traders — watching instant prices, talking to the trade and reading news and commentary. Most subscription market quote services have news services the merchants get direct from Chicago or Winnipeg.
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Before they begin their day, traders read daily newspapers to consider events outside of agriculture. Sometimes they’ll also cruise through some agricultural publications to get a grasp of farmers’ perceptions.
Then they’ll hit the hardcore commodity market reports, checking out their select list of resources for market updates. Some traders put high value on talking to buyers. Most read a few trusted analysts.
The merchants of large global companies use internal sources. These companies have their own weather departments and they reach into so many offices and cubicles, they know the trading news around the world before the trades actually happen.
Just as for farmers, though, all this information comes at a cost. You could sit in front of a computer all day ingesting an unending stream of seemingly essential market information, and then at the end of the day not have enough time left over to get anything done.
It’s why we’re built for efficiency, says Dave Bedard, just back from winning a gold medal from the Canadian Farm Writers Federation for his work as e-editor of and of the COUNTRY GUIDE DAILY E-MAIL NEWS, featuring regular price updates and daily commentary from market analyst Brian Wittal of Pro Com Marketing. The concept is to provide essential ag headlines from across the country, then let farmers click for the full story where they see direct impacts on their farm businesses.
Time is the most limited resource, whether you’re a farmer or a trader. So COUNTRY GUIDE asked three traders to tell us their most important reads, plus their suggestions for farmers.
Price
For a commodity trader, the staples of life aren’t bread and water but futures and cash prices. Bookmark the Chicago Mercantile Exchange’s (CBOT) web-site at and in Canada,
“Free sites such as Chicago mercantile exchange, and are good places to check out Chicago futures markets,” says LAC’s Armstrong. Subscription market quote systems usually have a news service along with market prices.
For farmers, how often you need to read prices depends on your marketing plan, your management style, the time of the year, and the volatility of the market. For some, weekly prices will suffice, but others are connected every morning to CBOT and ICE. Delayed quotes are free or you can buy trading platforms or newsletters with instant quotes piped directly from the trading floors in Winnipeg or Chicago. If you’re actively trading futures, you may want real-time prices.
Via instant BlackBerry and cellphone connections to the market and to buyers, farmers can react immediately to market forces. “With information travelling so fast, one change can quickly impact markets around the world,” says Trent Rude, merchandising manager with Viterra’s grain group in Regina.
Bruce Burnett, the Canadian Wheat Board (CWB) director of weather and market analysis, says it’s important to think about the amount of information you need and how often you need it. Like Armstrong and Rude, he says the answers will depend on your marketing strategy, and on the increasingly volatile markets.
Your needs will also depend on the time of year. “At certain times, like during transition between new and old crops the markets can move quite dramatically,” Burnett points out.
There are critical emotional considerations too. Staying away from watching the markets daily can help take the emotion out of your trades, giving you some time and distance to stick with your price targets.
Analysis
Good market analysis summarizes what’s happening to markets or government policy and then explains how those factors could affect prices and the markets for your products.
Commodity and trading companies hire a person or a company to execute transactions at the exchanges. As part of their service, these companies provide their customers breakdowns of what the market has done and where the futures are going. For example, the e-mailed analytical reports that Armstrong
