kevinkdog, US Bond Trader, Pariah Carey ,empty .,.....
I appreciate everyone's feedback and input into the discussion at hand
yYah, I figured these markets had low volume and interest , since they're hardly ever discussed, or are classified as the big heavy weights... I.E. the ES, TF, GC, CL, etc..
My main thing I look for with regards to trading is, price patterns and pattern setups via various timeframe charts that I monitor and look at daily.
And so I see these setups and patterns on Milk, Canola, Rough Rice, Butter ( the low volume and less traded contracts )
And since the patterns I look for occur on these commodities, I was curious if there was enough volume and if they we're liquid enough to even consider trading
I'm right on the state line between Memphis and Mississippi
How long have you been a Memphis resident ?
The following user says Thank You to mdsvtr for this post:
I understand your curiosity as there are many commodities that we use in our everyday lives (milk/butter/orange juice/coal/steel/etc) that are available to trade on exchange.
The problem is that these commodities adhere less to technicals and more to fundamentals. You need to have access to a lot of simple yet obscure data that is not going to be so easy for a day trader to access and then break down. For example, I know a softs trader that specialises in cocoa and coffee. He has analysts on the ground in south america who talk to local farmers and will relay information to him each day on how crops are doing etc. They will also have local meteorologists who will be constantly tracking weather patterns in the region. These are just 2 examples of information not easily accessible to the average joe.
On top of this there will be a tonne of variables that affect this years corn harvest which will affect it's prices. Even then it's complicated. We may experience weather that 95% of the time leads to a bumper harvest. With so much expected corn on the market we could estimate that prices may fall and take a short position. However what we didn't consider is that due to a shift in consumer demand over the last decade, farmers have been replacing some corn fields with wheat and soy crop and so despite the fantastic weather, the corn supply will not be over-bearing, and the price of corn may not fall as expected.
It's certainly find commodities and trading physical products an interesting field and one I study in my spare time. I wouldn't trade them though unless working on a desk with access to fundamental data.
The following 2 users say Thank You to CobblersAwls for this post: