United States faces the worst drought in 25 years strong and the price of soybeans and corn shoots. Learn to trade in commodities in the current situation.

The drought in the United States is having a strong impact on the price of raw materials. The commodites most affected by the worst drought in 25 years in North America have been soybeans and corn, whose prices have soared by 30 and 50% respectively during this month. In early July soybeans reached a record high of $ 1,717.25 per bushel. Corn on the other hand has now reached the $ 817 per bushel. According to the Department of Agriculture U.S. soy sales have fallen to the lowest level in six months and corn export sales also record low levels. The expectations are very encouraging and exports are expected to continue downward due to the weather forecasts do not advertise any truce in this drought until well after the summer. Whereas the United States is the largest exporter of these commodities worldwide, we can say that this drought may have a major impact on the final price of various foods later this year or even early 2013.

Investing in commodities CFD

Investors in the commodities market must react quickly to this upward trend in soybean and corn, preparing their strategies to raise their operating on these assets. One option before the price increase of these raw materials would enter the market through a CFD or Contract for Difference on soy or corn. With the CFD is operating margin, simply deposit a percentage of the cost of its operations to open position.

sell-buy

The operation according to the current market situation would be to buy a CFD on commodities (soya or maize in this case), since it is expected that due to the drought the price continue to rise. If the price of soybeans and corn continues to rise, the investor will sell its CFD at a price higher than it was purchased and this difference is where you get the profit.

But raw materials show high volatility because they tend to see fairly drastic changes in supply and demand. In this case, if the drought ended suddenly, against all weather forecasting and crop could recover, it is likely that the upward trend in soybean and corn to turn around, and in this case the operational purchase of CFD not generate profits. Although this situation is unlikely to be of it is always advisable to use tools to limit the risk and operational with stops in commodities. The above comments do not constitute investment advice and therefore we accept no responsibility for any use that may be made of them.