A legume native to Asia, soybeans trace their history far back, long before written records. Over time, the commodity’s applications have evolved tremendously from being considered sacred for its use in crop rotation, to becoming one of the main fixtures in our everyday diets. Today, the crop is best known for its use in the production of numerous foods, including soybean oil, soy meal, various meat and dairy substitutes, as well as animal feed. Soybean production is dominated by the U.S., as the commodity ranks the second most valuable agricultural export, trailing behind only corn [for more soybean news and analysis subscribe to our free newsletter].
When it comes to futures investing, contango and backwardation are two phenomenons that traders should always keep an eye on. Backwardation is simply the process whereby near month futures are more expensive than those expiring further into the future, creating a downward sloping curve for future prices over time [for more commodity futures news and analysis subscribe to our free newsletter].
Given all of the turmoil in markets this year, we have seen a number of investors change their positions on statements made in the past. Jim Rogers, for example, has now stated that he is looking into investing in Russia after snubbing the country for his entire investing life. But there is one thing that Rogers is still as bullish as ever on, agricultural commodities. It has been no secret that he has been a fan of these hard assets for quite some time, but a recent interview shows that he still loves these commodities and is as bullish as ever [for more agricultural news and analysis subscribe to our free newsletter].
As we wrap up the third quarter of 2012, many look ahead to finalize their portfolios for the year. By most equity standards, 2012 has been a very successful year, but the same cannot be said for commodities. As always, the commodity industry has picked its darlings and singled out its laggards, making profits for some and drawing up big losses for others. With nine months of the year in the bag, it will be a good time to reassess your holdings to see if it may be the right time to reallocate or if there are more promising opportunities out there [for more commodity news and analysis subscribe to our free newsletter].
Backwardation and contango are as inevitable as death and taxes when it comes to commodity investing. No matter what is going on the world, there will almost always be an asset in contango and the same can be said for backwardation. As a quick reminder, backwardation is the phenomenon in which near month futures are more expensive than those expiring further into the future, creating a downward sloping curve for future prices over time [for commodity news and analysis subscribe to our free newsletter].
2012 has been a relatively volatile year. After starting things off on a strong note, markets began to push and pull in either direction, and commodities have been no exception. Picking the right commodity investment for the year has been a tall order, as very few have been consistent. But now that we are more than halfway through the year, some have begun to pull away from the pack, and so too have the ETFs that track them [for more commodity news subscribe to our free newsletter].
With the first half of the year officially in the books, investors have plenty of data and developments in the commodity world to talk about. With natural gas jolting back and forth and speculators calling tops and bottoms in crude oil and gold, it has certainly been a busy six months for commodity traders. One of the biggest sticking points for commodities was the speculation of QE3, which was eventually announced in the form of “Operation Twist”, which will likely shape prices for the latter half of the year. But when it comes to some of the best and worst performers from that time period, some of the results may surprise you. Below, we outline the three best and three worst commodity performances from the first half of 2012 [see also Jim Rogers Says: Buy Commodities Now, Or You’ll Hate Yourself Later].