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Ethanol Production

This article by Absolute Futures will show how many bushels of Corn are required to produce just one gallon of ethanol. This will definitely impress upon anyone who trades the commodity corn, how Ethanol production impacts the total supply of Corn available for live cattle feed, as well as, other domestic uses.

Each bushel of corn can produce up to 2.5 gallons of ethanol fuel. Only the starch from the corn is used to make ethanol. Most of the substance of the corn kernel remains, leaving the protein and valuable co-products to be used in the production of food for people, livestock, feed, and various chemicals. For example, that same bushel of corn (56 lbs.) used in ethanol manufacturing can also produce the following products depending on the process used to produce Ethanol. Ethanol is produced from corn by using one of two standard processes, wet-milling or dry-milling. Dry-milling plants cost less to build and produce higher yields of ethanol, but the value of co-products is less.

Corn To Ethanol

Absolute Futures has clients everyday trading Corn. With all the publicity about Ethanol being made from Corn, we decided to write a couple of simple articles explaining what Ethanol is, how it is produced, and the amount of corn required to produce a gallon of Ethanol. This is the first in a series of articles about Ethanol. We hope it will enlighten anyone who trades Corn or is considering trading the commodity Corn in the future.

Ethanol is a colorless, volatile, flammable liquid that is the intoxicating agent in liquors and is also used as a fuel or solvent. Ethanol is also called ethyl alcohol or grain alcohol.

The Commodity Broker

The right commodity broker is the most important thing you can do to place the odds in your favor of being successful when considering the trading of commodity markets. When looking for a commodity broker to work with there are several important qualities the commodity broker must have.

The first quality you should look for when considering a commodity broker is someone who is honest in their business affairs. How can you determine a brokers' honesty? There are a few different ways to determine rather or not the person is honest in their professional dealings. You can go to National Futures Association website and actually check the commodity brokers past history and find out if there have been past charges against the person and rather or not the charges were substantiated. Another excellent method one can use to determine if the commodity broker you are considering is an honest person, is to ask the commodity broker for references that you can check out.

Daytrading Soybeans

The first thing you must know to day trade soybeans is the contract specifications.

The important specifications you should know and understand before day trading the soybean market are detailed below.
The soybean futures contract is for 5,000 bushels of soybeans.

The soybean tick size and its value is important to know. A tick is the minimum movement permitted in the contract price. For soybeans it is 0.25 cents per bushel, which equates to $12.50 per contract.

Trading with the Commodity Trend

There are several principles which should be part of every futures trading strategy. They are: 1) Make commodity trades with the primary futures trend, 2) Liquidate your commodity market losers quickly, 3) Leave commodity profits accumulate, and 4) Learn to control commodity futures risk for any commodity market trade. The futures trader should make sure their commodity trading strategy includes each of the above futures trading elements in order to be a successful commodity trader.

Trade with the commodity trend relates to the decision of how to make a commodity futures trade. It simply means always make commodity trades in the direction of the prevailing futures price direction.
Mathematical analysis of commodity price data has shown that futures price changes are primarily random with a small commodity trend component. This observation is extremely important to commodity traders wanting to pursue commodity trading in a scientific manner. It means that an attempt to trade short-term futures patterns not based on the primary commodity trend are going to fail.

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