Summary

• Commodities are often quoted in U.S. dollars, making commodities cheaper or more expensive to the rest of the world based on the direction of the dollar.
• The 12-month and 36-month rolling correlations of $DXY to S&P GSCI note an increasing negative correlation.
• Longer-term directional moves of the U.S. dollar may imply the general direction of commodities as a sector.

I recently spoke at an ETF conference about commodities. During the panel discussion I mentioned that commodities includes a lesser known 
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Copyright ©2016 Mark Shore. Contact Mark Shore for permission for republication at info@shorecapmgmt.com Mark Shore has more than 25 years of experience in the futures markets and managed futures, publishes research, consults on alternative investments and conducts educational workshops.www.shorecapmgmt.com 

Mark Shore is also an Adjunct Professor at DePaul University’s Kellstadt Graduate School of Business, where he teaches the only known accredited managed futures course in the country. He is also a Board Member of the Arditti Center for Risk Management at DePaul University.

Past performance is not necessarily indicative of future results. There is risk of loss when investing in futures and options. Futures and options can be a volatile and risky investment; only use appropriate risk capital; this investment is not for everyone. The opinions expressed are solely those of the author and are only for educational purposes. Please talk to your financial advisor before making any investment decisions.

CTA EXPO New York 2016
For the first time the New York event on April 21, 2016 will be a combination of the Emerging Manager Forum and CTA Expo. The Expo / Forum is a one day conference consisting of speakers and panels combined with extensive networking opportunities. Attendees can attend any of the presentations throughout the day or decide to talk and network with other industry professionals.
 
Topics include:
Presentation of the CTAExpo Lifetime Achievement Award
Recipient: Sol Waksman (Barclay Hedge, Ltd)

An Insider’s Look at Platforms…Their Selection and Use for Managers and Investors
The panel will discuss guidelines for making the decision that the use of a platform is the right decision for investors and managers and what criteria should be used when selecting a platform.

The Astrology of Alternatives…What Investors and Managers Should Expect in 2016 and Beyond
A bestselling author and globally recognized expert in alternatives investments will discuss the impact of current events on managers and the impact these events are having on investor decisions.
Bob Swarup, PhD. (Camdor Global)

Marketing Your Strategy & Out Marketing Your Competitors
Bruce Frumerman is an expert in helping financial service firms create brand identities for their organizations and in developing marketing strategies and programs. He will discuss how to differentiate yourself in a crowded investment landscape.

Keynote Speaker
Trading Traps…Too Many to Count
Peter Borish is a prominent alternative industry pioneer, investor and opinion leader. He will discuss roadblocks he has experienced during a successful career and their impact on investment decisions.
Peter Borish (Quad Capital)

Manager Operational Issues in 2016 and Their Impact on the Investment Decision
Research has shown about 80% of the investment decision a client makes is based on factors other than track record. Managers are confronted with new legal and operational issues each year. They must keep abreast of these issues to satisfy clients. The panelist will discuss new challenges that face managers in 2016 as a result of regulatory changes.

Emerging Manager Selection…An Investors Perspective
A look at what three asset allocators consider before they make a decision to invest with an Alternative Manager and what managers need to know before they market to the investment universe represented by each panelist.
​
Emerging Managers and Emerging Manger Investors…Opportunities in Marketing
and Investing in Europe
 
Date: Thursday April 21, 2016
Time: 8am to 4:30pm. Cocktail reception immediately following
Location: The Roosevelt Hotel, 45 E 45th Street, New York, New York,

​For more information and registration click here

The Applied Research Company and Shore Capital Research LLC have joined together on a futures market research report to be published very soon. Stay tuned for more details.

For questions email info@shorecapmgmt.com

Planet Microcap Ep. 7 - Commodity Futures Market Roundtable with host  Robert Kraft and guests Mark Shore (Shore Capital Research) and Shelly Kraft (StockNewsNow.com).



Click here to listen to the episode

In this episode, the guests cover the following topics:

• What are the Commodity Futures Markets?
• How do you buy and sell futures?
• Is there a correlation between the Commodity Futures Markets and MicroCaps?
• What is the intrinsic relationship between the Commodity Futures Markets and MicroCaps?
• How can understanding the Commodity Futures Markets help you when analyzing MicroCap stocks?
• How the Commodity Futures Markets work
• Examples, experiences trading on the Commodity Futures Markets
• History of the Chicago Board of Trade
• Where to find more information about Commodity Futures Markets
• For more information about Mark Shore and Shore Capital Research, go to: www.ShoreCapMgmt.com
• Follow Mark on Twitter @Shorecap

Follow the Planet MicroCap Podcast on Twitter @BobbyKKraft.

Mark Shore has more than 25 years of experience in the futures markets and managed futures, publishes research, consults on alternative investments & conducts educational workshops.
www.shorecapmgmt.com email: info@shorecapmgmt.com

Mark Shore is also an Adjunct Professor at DePaul University’s Kellstadt Graduate School of Business, where he teaches the only known accredited managed futures course in the country. He is also a Board Member of the Arditti Center for Risk Management at DePaul University.

Past performance is not necessarily indicative of future results. There is risk of loss when investing in futures and options. Futures and options can be a volatile and risky investment; only use appropriate risk capital; this investment is not for everyone. The opinions expressed are solely those of the author and are only for educational purposes. Please talk to your financial advisor before making any investment decisions.

The Professional Risk Managers' International Association (PRMIA) and CME Group Present

Innovations in Commodity Investing

The discussion will cover changing fundamentals for commodity investors such as backwardation and correlation; new ways to access commodity markets such as ETFs, swaps and futures and other emerging trends in the commodity markets.

This event is sponsored by the CME Group and PRMIA in association with CAIA.

Speakers include:  READ MORE

Follow Mark Shore on Twitter, Facebook and Linkedin

Mark Shore has more than 25 years of experience in the futures markets and managed futures, publishes research, consults on alternative investments and conducts educational workshops. www.shorecapmgmt.com 

Mark Shore is also an Adjunct Professor at DePaul University’s Kellstadt Graduate School of Business, where he teaches the only known accredited managed futures course in the country. He is also a Board Member of the Arditti Center for Risk Management at DePaul University.

By Mark Shore

As commodities are growing in popularity for investment allocation, I found this to be a good opportunity to introduce commodities and futures.

One could argue commodities have been around since the beginning of civilization. People have produced, paid or bartered for commodities to use for either production or to consume. Some of the uses of commodities include food, energy, construction, manufacturing, and clothing.

According to the Merriam-Webster dictionary, commodities are defined as: 1) an economic good. 2) A product of mining or agriculture. 3) An article of commerce especially when delivered for shipment. 4) A mass produced un-specialized product. [i]

In today's global markets both large and small firms will trade and hedge commodities as part of their daily business as either a producer or end-user of the commodity. For example a chocolate candy producing firm will need to purchase cocoa, sugar and of course energy to fuel their factories. If they do business in foreign countries they may need to buy and sell foreign currencies for hedging or delivery purposes.

In today's global markets both large and small firms will trade and hedge commodities as part of their daily business as either a producer or end-user of the commodity. For example a READ MORE

[i] Shore, M. (2011) DePaul University 798 Managed Futures Lecture notes

Copyright ©2014 Mark Shore. Contact Mark Shore for permission for republication at info@shorecapmgmt.com Mark Shore has more than 25 years of experience in the futures markets and managed futures, publishes research, consults on alternative investments and conducts educational workshops. www.shorecapmgmt.com 

Mark Shore is also an Adjunct Professor at DePaul University’s Kellstadt Graduate School of Business, where he teaches the only known accredited managed futures course in the country. He is also a Board Member of the Arditti Center for Risk Management at DePaul University.

Past performance is not necessarily indicative of future results.  There is risk of loss when investing in futures and options.  Futures and options can be a volatile and risky investment; only use appropriate risk capital; this investment is not for everyone. The opinions expressed are solely those of the author and are only for educational purposes. Please talk to your financial advisor before making any investment decisions.

By Mark Shore

In our previous article we introduced the commodity markets. Moving forward we will discuss more specific educational topics about commodities and futures. This article discusses some of the fundamentals of the soybean market.

According to the USDA, processed soybeans are the largest source of animal protein feed in the world and the second largest source in the world for vegetable oil.[i]  An estimated 90% of oilseeds produced in the U.S. are soybeans. The remaining 10% include cottonseed, sunflowerseed, canola, rapeseed and peanuts.

Soybeans are only second to corn as the most planted field crop in the U.S. As Midwest farmers tend to produce a higher soybean yield and lower cash cost than Southern or Eastern farmers, over 80% of soybean production occurs in the upper Midwest of the United States.

Soybean futures contracts are one of the most liquid of the commodity futures markets. Soybean futures were introduced in 1936. The soybean complex (soybean meal and soybean oil) was introduced as futures contracts in the 1950s.[ii] There are seven standard expiration months for soybean futures; January, March, May, July, August, September, November. Soybean meal and soybean oil futures contracts also include the months of October and December.

The full size contracts are 5,000 bushels per contract. The CME Group also trades mini-sized contracts of 1,000 bushels per contract. Soybeans are priced at cents per bushel. Soybean meal is priced at dollars per short ton. Soybean oil is quoted at cents per pound.

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[i] http://www.ers.usda.gov/topics/crops/soybeans-oil-crops.aspx#.UZ-j7NjfKSo

[ii] Self Study Guide to Hedging with Grain and Oilseed Futures and Options. CME Group P.4

Follow Mark Shore on Twitter, Facebook and Linkedin

Copyright ©2013 Mark Shore. Contact the author for permission for republication at info@shorecapmgmt.com Mark Shore has more than 25 years of experience in the futures markets and managed futures, publishes research, consults on alternative investments and conducts educational workshops. www.shorecapmgmt.com

Mark Shore is also an Adjunct Professor and Board Member of Arditti Center of Risk Management at DePaul University's Kellstadt Graduate School of Business in Chicago where he teaches a managed futures / global macro course and an Adjunct at the New York Institute of Finance. Mark is a contributing writer to Eurex Exchange, Reuters HedgeWorld, CBOE Future Exchange (CFE) and Micro-Cap Review.

Past performance is not necessarily indicative of future results.  There is risk of loss when investing in futures and options.  Futures and options can be a volatile and risky investment; only use appropriate risk capital; this investment is not for everyone. The opinions expressed are solely those of the author and are only for educational purposes. Please talk to your financial advisor before making any investment decisions.

By Mark Shore
3/1/2013

As the introductory Commodity Corner column I found this to be a good opportunity to introduce commodities and futures.

One could argue commodities have been around since the beginning of civilization. People have produced, paid or bartered for commodities to use for either production or to consume. Some of the uses of commodities include food, energy, construction, manufacturing, and clothing.

According to the Merriam-Webster dictionary, commodities are defined as: 1) an economic good. 2) A product of mining or agriculture. 3) An article of commerce especially when delivered for shipment. 4) A mass produced un-specialized product. [i]

In today’s global markets both large and small firms will trade and hedge commodities as part of their daily business as either a producer or end-user of the commodity. For example a chocolate candy producing firm will need to purchase cocoa, sugar and of course energy to fuel their factories. If they do business in foreign countries they may need to buy and sell foreign currencies for hedging or delivery purposes. (See “Currencies in Your Future Portfolio?” of the Spring/Summer 2012 issue).

To manage their price risk, a commodity producer, such as a farmer may sell a futures contract to lock-in their selling price. An end-user, such as a coffee chain may buy a futures contract to lock-in their purchasing price. Keep in mind commodity markets tend to be mean-reverting markets as they spike or decline from an average price and then revert back towards that average price overtime. This is often due to shocks in the system such as increased demand, reduction of supply, weather concerns, disruption of distribution channels or possibly political or regional events. If a commodity becomes too expensive, the market participants’ behavioral mechanism will appear as they seek less expensive substitutes. This is known in economics as the substitution effect and one of the differences to note between commodity and equity trading.

Commodities are traded in two common locations: either the spot/cash market usually reserved for industry or sometimes known as “commercials” such as producers, distributors and end-users as the actual physical commodity is traded. Or the products trade on an exchange such as one of the futures exchanges found around the world.  The futures exchanges are often utilized by both commercials and speculators. An exchange offers commercials the opportunity for immediate offset of their commodity risk by speculators offering liquidity to take on the risk. If a commercial has a loss from hedging, it often means they profited in the underlying cash market, because they are holding the opposite direction in the cash market. One can think of the loss on the hedge as a premium on an insurance policy.

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[i] Shore, M. (2011) DePaul University 798 Managed Futures Lecture notes

Copyright ©2012 Mark Shore. Contact the author for permission for republication at info@shorecapmgmt.com Mark Shore has more than 20 years of experience in the futures markets and managed futures, publishes research, consults on alternative investments and conducts educational workshops. www.shorecapmgmt.com

Mark Shore is also an Adjunct Professor at DePaul University's Kellstadt Graduate School of Business in Chicago where he teaches a managed futures / global macro course and an Adjunct at the New York Institute of Finance. Mark is a contributing writer to Reuters HedgeWorld.

Past performance is not necessarily indicative of future results.  There is risk of loss when investing in futures and options.  Always review a complete CTA disclosure document before investing in any Managed Futures program.  Managed futures can be a volatile and risky investment; only use appropriate risk capital; this investment is not for everyone.  The opinions expressed are solely those of the author and are only for educational purposes. Please talk to your financial advisor before making any investment decisions.