The Rude Awakening
Wall Street, New York
Thursday, September 21, 2006 ------------------------- - A corny way you can make some dosh in the commodity
markets,
- Looking to the future for call options and travel
opportunities, riding a sugar high to the bank,
- Farmers on the frontline, commodities start to level,
all the markets and more...
------------------------- Joel Bowman, still daydreaming of "On The Road" adventures,
reports... A few months back we had the privilege of fulfilling a
lifelong dream of ours: we took a road trip across the
United States. The rewards of our odyssey did not
disappoint. In case you missed the highlights, you can
check them out on this here map:
http://www.dailyreckoning.com/map.html But the vast planes of Middle America are more than just a
playground for wandering hobos and walkabout antipodeans.
Indeed, they feed a good portion of the world. From beans
to corn, sugar to wheat, cattle to fowl...somewhere in
middle America someone is growing what is served on your
plate...and plates, bowls and saucers around the globe. It's no surprise then that trading these agricultural
commodities, or "ags", is big business. And big business
can lead to big profits for those who know how to trade
them properly. In the following article, guest Rude
columnist and regular MarketWatch guru, Kevin Kerr, gives
us a few frontline insights about making money in the corn
market... --- Buying Dips ---
Why Buy a Silver ETF When You Could Make 400% in Just 34
Days! And that was just one run of a "sterling" options double
play that saw an additional 67% gain in only 15 days. Join this Maniac's rampage and YOU could rake in even more
than this – and faster - as the commodities bull really
begins to heat up! So far in 2006, the Maniac Trader's 11 for 11 - let him go
to bat for you today http://www.isecureonline.com/Reports/RTA/ERTAG914 ---------------------------- Popping Corn
By Kevin Kerr The closest most people get to trading grains is buying a
box of Shredded Wheat. It's too bad really, because the
grain futures markets often provide excellent trading
opportunities. At this very moment, for example, buying
corn futures – or call options on corn futures – looks like
a very good risk/reward trade. I'll tell you why in just a
moment. The grain markets, which include things like wheat, corn,
soybeans, oats, and rice, mainly trade in Chicago. Wheat
also trades in Kansas and Minneapolis. Actually, the
Minneapolis Grain Exchange (MGE) is the largest cash grain
market in the world. But corn futures trade on the Chicago
Board of Trade. The symbol for corn is easy enough to
remember; it's "C." The price of corn, currently around 247
cents a bushel, has slipped from its recent highs, thanks
mostly to optimistic expectations for this year's US corn
crop. The USDA has been fueling this expectation with its
overly optimistic crop reports. Some of us who trade these
grain markets also call them "crap" reports because they
often paint a rosy picture of an abundant and healthy
harvest to come. But in the case of this year's corn
harvest, we disagree. 
Anecdotal, on-the-ground reports from all over the Midwest
indicate that this year's corn crop will fall short of the
USDA's estimates. Look at part of an e-mail I got from a
farmer recently, just one of many who have written me: "Dear Kevin: I live in southwest Ohio. I'm 57 and farmed
all my life...traded commodities for 25 years or so...In
our area we've been blessed with lots of great weather and
plenty of rain and we have above-average soils for farming
in this area. We are going to have an above-average crop
this year in both corn and soybeans. But that's not what we
hear from other areas of the state or the corn belt. I know
[the USDA] says we're going to have a record crop nation-
wise, but I don't believe it. 
"Every corn belt state has areas that are just terrible.
We may have record yields here, but I'll have to see it to
believe it...I know there's a lot of corn that's only going
to make 125 bushels an acre...if that. [Compared to an
expectation of 160 bushels]...I can show you corn that
won't make 140bu. because it lost most of the nitrogen back
in May and June from too much water." Pretty convincing stuff since that's straight from a farmer
on the front lines, not some talking head on CNBC or in
Washington saying all is well with corn. And now as we
approach fall, temperatures in the Midwest have plummeted
and all the rain they're geting may turn from being a
Godsend to a disaster. Now concerns are switching from
drought to a frost warning. Frost? Yes a frost event this
early in the season, combined with moisture could destroy
the crop. The USDA estimates 67%-83% of the corn crop in the upper
Midwest is still immature, and therefore susceptible to
frost damage. Clearly, this year's corn supply is at risk.
So why isn't the corn price much higher? Probably because
the prices of most commodities are falling at the moment,
especially in the energy complex. The tumbling price of
unleaded gasoline, in particular, could be weighing on the
price of corn. Corn makes ethanol. Ethanol goes into gasoline. So what's
bad for gasoline could also be bad for corn...at least on
the short-term. And that's where we are right now. Now if
you subscribe to the idea that energy commodities are going
to fall even further, maybe corn doesn't interest you. Fair
enough. Energy prices could easily continue to fall for a
while. But I'm looking at this weakness as a buying
opportunity...for corn. It's true that oil supplies are abundant for the moment.
But that abundance may not last. Winter heating season will
soon be upon us, pipelines remain susceptible to terrorism
and rust, Nigerian oil workers just held a three-day "test"
strike, whatever that means, and the Middle East remains a
hotbed of potential conflict. In other words, the long side of the oil market is probably
a good place to be. But it's also an uncomfortably volatile
place to be right now. So I'd much rather take the long
side of the corn market – a market where supply could be
surprisingly less than expected, and demand could be
surprisingly stronger than expected. [Joel's Note: Every week Kevin alerts his readers to
exactly what is going on in the commodity markets. Whether
they are raging like a bull or melting to the ground, as
they appear to be doing right now, Kevin's readers are
making money. Options are not as difficult as they sound
and, with the right guidance, can be terrifically
profitable. Included below are some examples of actual
alerts sent to Kevin's readers. Simply follow the link to
see how easy it really is: Riding a Sugar High
http://www.isecureonline.com/Reports/RTA/ERTAG615 --- Number 1 Newsletter says... --- From the newsletter Ranked No.1 by Hulbert Financial
Digest: UNCOVERED: 11 of America's New Energy Saviors Buy into these new non-oil outperformers Right Now, and you
could see triple-digit returns - in as little as 6 months! http://www.isecureonline.com/Reports/OST/EOSTG943 ---------------------------- 
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