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Saturday, December 02, 2006

Gazette Corner: Corn Prices Double in one Year--On Demand plus speculation

It should be interesting to watch corn prices in the coming years---everyone is quite concerned when gasoline prices double, or natural gas doubles in a short period of time....due to speculation, options trading....Click on the post for the full story on corn prices in the Janesville Gazette.

I sure like the idea of burning corn as a fuel----but if speculators make all the money, at what point will the demand for regulation begin----will it be after a disaster like Enron or before.

I suppose we should go over some hedging techniques---like buying the June 3.00 Call and then trading it for profit to act as a hedge on rising prices for our home heating. But---as a general rule, when each person in America turns into a daytrader of corn options just to keep heating bills low---it is a bad sign. I still like tango dancing as an obsession rather than option trading. Make a note of it.

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