Bloomberg Survey: Agricultural Commodity Futures Prices Most Accurate, Crude Oil Prices Least Accurate

I had a chance to review a video from last October in which a gal from the Bloomberg News organization reported on a survey taken regarding commodity prices. The survey concluded that commodity prices are wrong 27% of the time, but there’s a little more to the story…

A two month survey last year of 270 “traders” revealed the least confidence in actual commodity “pricing,” and the most confidence in currency & stock prices probably because the latter two are more publicly involved and regulated, whereas commodity pricing is not. However, and this is what caught my attention, another conclusion of the survey revealed trader’s consensus is that agricultural commodities are the most accurately priced (more stable), and crude oil prices are the least accurate – as we all know from the unstable gas prices at the pump.

Laura Taylor, a senior market strategist at RJO Futures in Chicago, shared her fundamental analysis insight regarding the current commodity futures pricing situation by stating, The whole world comes to the Chicago Board of Trade and Mercantile Exchange for their agricultural products because of the solid reputation they have built between the farmer and the users.”  Taylor added, “With energy products, there may simply be too many ‘middle-men’ involved causing prices to fluctuate erratically – not surprising results from the survey.”

It doesn’t surprise me that the agricultural commodity futures markets are considered the most stable of all futures markets. The grains are the most favorable market for me trade and there is good reason why I stopped trading crude oil and other energy markets in the last decade…

ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.