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Victor Niederhoffer


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Corn--A Dangerous Commodity to Nibble On

This chart of corn--good for pigs, cattle, and humans, shows it at three-year low at $2.10 a bushel and shows the danger of playing commodities as an alternate to stocks. Granted, energy is a commodity that has gone up, as has Wal-Mart. But insights of Julian Simon on how technology lowers costs of commodities when scarcity arises, and stays there, and insights of anyone who's studied economics and realizes that the rate of return on non-innovative businesses falls to the treasury yield, should be noted.

Re: Corn... Michael Stallings comments:

In looking at the dates when it appeared that corn peaked, I believe that those are "pre-harvest" dates. And, as there was a lack of adequate moisture at that time, it is possible that the forecast was for a low corn crop. But, now we are getting towards "post-harvest" and as mother nature and the mistress of the markets are sisters, for one sent rain, the crop grew and now it looks like it will be a bumper crop, in some states, and the mistress reversed her course again, catching those who weren't vigilant. Haven't looked at soybeans, but would imagine that the two old girls did the same thing there. Farmers in Kansas are smiling again.

Re: Corn... Scott Barrie writes:

U.S. corn is planted in the spring (Late March/April/early May) and is harvested in October/November. The crop pollinates in late June/early July as the crop "silks".  Note, these times are national averages - hence will not fit a specific area to a "T". However, I believe you will find most of the highs in the corn market and the most strength is found in the period from planting through pollination. Corn prices tend towards strength this time of the year as future supply is at risk. However, once the crop is "made", it tends to fall.