Author Archives: Claudia Soria
Reverse Crush Spread
A reverse crush spread is a an opposite strategy to the crush spread. In this strategy the speculator buys (long) futures contracts on soybean oil and soybean meal (output) and sells (short) futures contracts on soybean (input). This is a … Continue reading
Cattle Feeder Spread
A cattle feeder spread is a processing spread trade where feeder cattle (thin cows) futures are bought (long) and live cattle (fat cows) futures are sold (short) simultaneously. Cattle feeders use this hedging strategy to hedge the later purchase price … Continue reading
Crush Spread
A crush spread is a processing spread trade where soybean futures are bought (long) and soybean oil and soybean meal futures are sold (short) simultaneously. Processors use this hedging strategy to hedge the later purchase price of soybeans and the … Continue reading
Processing Spreads
A processing spread is a spread trade where futures contracts are bought (long) on the input (raw materials) and futures contracts are sold (short) on the output (finished goods) simultaneously. Manufacturers and processors use this hedging strategy to hedge the … Continue reading
Crack Spread
A crack spread is a processing spread trade where crude oil futures are bought (long) and gasoline and heating oil futures are sold (short) simultaneously. Oil refineries use this hedging strategy to hedge the later purchase price of crude oil … Continue reading
Bear Spread
A bear spread strategy implies the speculator is short (sells) the nearby commodities futures contract and is long (buys) the distant futures contract. Under normal market conditions, the speculator will profit if the price difference between contracts widens. Under an … Continue reading
Bull Spread
A bull spread strategy implies the speculator is long (buys) the nearby commodities futures contract and is short (sells) the distant futures contract. Under normal market conditions, the speculator will profit if the price difference between contracts narrows. Under an … Continue reading
Futures Spreads
Futures spreads combine both short and long positions (called legs) at the same time in related futures contracts. Spread volatility is lower than short or long positions held individually since prices of related contracts tend to move in the same … Continue reading
Trinitario Cocoa Bean
The Trinitario cocoa bean is hybrid of the Criollo and Forastero varieties. Trinitario was created in Trinidad after the Forastero variety was introduced and crossed with the local Criollo variety in the eighteenth century as a consequence of the Criollo … Continue reading
Forastero Cocoa Bean
The Forastero cocoa bean is possibly native to the Amazon Basin. It grows in several South American countries, including Peru, Ecuador, Colombia, Brazil, Guyana, and Venezuela, as well as in Africa and South-East Asia. The Forastero cocoa bean is the … Continue reading