What sources of data do you use to analyze the markets? 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 sources of data do you use to analyze the markets?
Dan Hueber: Really a lot of it is independent research. But, of course, I don't originate the data. I have to go to sources to pick that up. The most accessible probably for anybody out there are, is, for the ag side of it, the USDA. USDA has a tremendous treasure of not only current data, estimates of what is happening domestically and around the world, but they have a historical database that is really unrivaled to anybody out there, which is why the USDA continues to be the go-to source when it comes to crop production estimates, planting projections, whatever the case may be, because certainly one, they're not tied to any bias of the market. But, number two, I mean, they have years and years of data on which they can rely upon and come up with sources. Beyond there, the Dow Jones, news services, Reuters, everybody does certainly a good job of providing what is happening around the world. And thankfully I'm also, the company I'm with, we are a sister company to a commercial grain firm, so we do get some insight from the cash markets and what is happening on the world trade. So, any sources of information like that are certainly beneficial.
Naomi Blohm: My primary source is the Newswire. So, if you're not quite familiar with what that is, you can, sometimes DTN would have it or a service like that and then it just tells you what is happening around the world in every single aspect of the market. And I go there first because it's just the news and it is primarily unbiased and I can just read the facts. From there, though, I absolutely read different advisory services that are out there. I like to hear other people's opinion on things. I look at probably three or four of them every day. So, I take a look at things in the morning, I read things at night and then also I watch and track basis around the country and see what the actual cash market is doing because a lot of times the cash market will tell the truth about what is actually happening out there. So, probably at least ten different resources I'm looking at continuously.
Tomm Pfitzenmaier: You've got to watch what the markets are doing. So, one of the things I do is I watch charts, I watch technicals, I keep track of that every day. I've got certain technical analysis that I watch and give higher priority to. I've got half a dozen different sources I read every night and every morning from the Wall Street Journal to private estimates to the company we clear through, their research analysts. So, I try to get a broad supply of information, I guess you'd say, that I kind of use my experience and kind of process and say okay, this makes sense, this is bologna.
Don Roose: Well, we do, do a lot of our own research. From a crop standpoint we do a lot of surveys. We work very hard from a technical standpoint because the markets are so technically dominated. So, we use a lot of technical analysis, moving averages, chart points, where funds move in and out. So, we watch the commitments of traders data, that is a report that the government puts out weekly that tells you where everybody is sitting. So, we utilize that. We have our own trading system that we've had since the '80s that we keep refining and that really just tracks where the funds move in and out and then we have technical systems that tell you how overbought and oversold, kind of like an accordion, how much airs in and out and we think all those are very important. But, you always have to start with analysis. You have to make sure you know what the government is saying from a fundamental standpoint because overall they're the ones that rule the marketplace.
Darin Newsom: I look at how the market is moving itself. I don't care about USDA tables, as everyone who watches the program knows. I'm concerned with how, what the market is telling us itself. So, it's learning how to read what the market is saying through basic trends, price direction over time of the futures market, of future spreads like we always talk about. That's what tells me what is going on in the markets and that is what we analyze.
Elaine Kub: I honestly was really thrown for a loop when the government shut down last year and we had no access to the government reports because even though most of them are backward looking, you know, they say what the commercial position was in the futures markets last week, not going forward and not right now, nevertheless, you can see trends, you can see what is building up and then anticipate what might come next. So, I think government reports are really important to be looking at the trends of what people are doing even if they are backward looking.
Walt Hackney: Exposure to the actual commodity, meaning simply day in and day out, physically involved in the transactional end of that industry. And that is hogs and that is cattle. However, cattle is much more involved in that area as we speak than hogs. Hogs have become more of a fixed commodity. There's not much marketing expertise that goes into the hog procurement end of that industry anymore. So he's got to understand so many facets of the industry. And the main one is the genetics of the product he's buying.