Grain correlations

Quote from local:

Just want to add that there is a stong correlation from the perspective of the producer as well .i.e. as this year progresses and the market realizes a tightening of the balance sheet for each of corn,wht and beans, the market should revert to a fight for new crop acres that will ultimately be determined by relative values of new crop prices. Much like 2007 when prices ultimaely peaked in July of 2008. Just my 2c.

Regards, local
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are the total crop acres relatively constant each year?
 
I only trade Coffee/eurodollar and Silver/Cotton spreads. They both have more than 90% correlations for obvious reasons.:D
 
Quote from mizhael:

are the total crop acres relatively constant each year?
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Acres are relatively static each year and thus the " fight for acres" via new crop values. A relatively safe arguement. Inverted spreads distort relative new crop values, however.

Regards,local
 
Quote from heech:
----surprised by some of the correlations....
----Natural gas and euro-dollar have a -85% correlation....
----natural gas and crude are only 17% correlated?
----Anyone make sense of that?
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1) Natural gas and eurodollars can be randomly, strongly, inversely, correlated during the interval you're looking at.
2) Natural gas is more of a domestic (USA) commodity. It "adheres" to its fundamentals more closely. Crude oil is more international in scope and driven by excess speculation. :cool:
 
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