Social Studies

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What Does a New Producer or Trader Need to Know About Commodity Markets? | Ask the Analysts

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What commodity would you recommend to a new trader? In each Ask the Analyst segment, experienced commodity market analysts provide thoughtful insight on trading skills, price trends, and strategies to better understand how the markets work.

Lessons Learned (20) | 1980s Farm Crisis

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Many lessons are learned from the farm crisis of the 1980s, while those lessons not learned leave open the possibilities of those events repeating. This segment is part of the documentary The Farm Crisis, which examines the tragic circumstances faced by farmers for most of the 1980s, when thousands were forced into bankruptcy, land values dropped by one-third nationally, and sky-high interest rates turned successes into failures seemingly overnight.

Commodity Markets: Managing Risk with Cash Markets and Forward Contracting | Market to Market Classroom

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Learn about the two methods that are commonly used by farmers and ranchers to market commodities and manage risk in this video from Market to Market Classroom. Agriculture production is full of risk. In any year, growers can face weather perils that include droughts and floods. Even when producers escape those extremes, conditions must be favorable at key periods during planting, growing, and harvesting. And even after crops are grown and harvested, producers still encounter risk. Changes in consumer demand, unforeseen international events, costs for fuel, and other circumstances can all influence profit. But the greatest risk of all may not be associated with producing commodities, but in marketing, or selling, them for a profit. Two methods that are commonly used to market commodities are cash marketing and forward contracting. 

Cash marketing takes place when a farmer sells his commodity for cash. A trade on the cash market always involves transfer of the actual commodity.The farmer delivers their grain to the elevator after harvest or from storage, and receives the current price. The farmer's primary risk is if prices move lower while holding the commodity, he or she will have missed the opportunity to sell at the higher price.

A forward contract is a way to minimize the risk that the price of a commodity might go down before a farmer sells. A forward contract is an agreement to deliver a specific amount of a specific commodity at a specific time in the future. Because no one really knows whether prices will go up or down, a forward contract "locks-in" a price that is higher than the current cash price.

How are Commodity Markets Regulated? | Ask the Analysts

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Learn how commodity markets are regulated with this video from the Ask the Analysts segment of the Market to Market series. In each Ask the Analyst segment, experienced commodity market analysts provide thoughtful insight on trading skills, price trends, and strategies to better understand how the markets work.

How Did You Get Started in Commodity Market Analysis? | Ask the Analysts

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How did you get started in commodity market analysis? In each Ask the Analyst segment, experienced commodity market analysts provide thoughtful insight on trading skills, price trends, and strategies to help students and producers better understand how the markets work.

What Chance Does a Single Investor Have Against High-Frequency Trading? | Ask the Analysts

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What chance does a single investor have against high-frequency trading? Experienced commodity market analysts provide thoughtful insight on trading skills, price trends, and strategies to better understand how the markets work.

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