Alternative Links: Growing Fivefold in the Next Decade

Alternatives:

Investors Plan to Boost Alternatives Allocations – (Think Advisor)

Alternative investment growth to boom in next five years – (Reuters)

Managed Futures:

GAIM 2015: What’s next for managed futures? – (Automated Trader)

Managing the Future With These Alternative Funds – (Morningstar)

Suppressing volatility? Easy. Eliminating risk? Not so easy – (Investment News)

Managed futures/macro most sought after alts strategy – (CTA Intelligence)

Have wealth managers overlooked the best hedging strategy in town? – (Investment Week)

High Volatility Reduces Risk – (Top Traders Unplugged)

Diversification:

How Long do Investors Have to Wait Before They See the Benefits of Diversification? – (Irrelevant Investor)

Markets:

With 61 Seconds in a Minute, Markets Brace for Trouble – (Bloomberg)

What if Risk-Free Returns Slowly Go Away? – (A Wealth of Common Sense)

U.S. Corn, Soybeans Rise on Smaller-Than-Expected Stockpiles, Planting – (Wall Street Journal)

Rain Makes Grains (Die?) – (Attain Alternatives Blog)

Oil Prices Fall After Inventory Data – (Nasdaq)

Rain Makes Grains (Die?)

Forget what’s happing halfway around the world in Greece, we’ve got a storm brewing here in the heartland of America, in the grain markets. One quick look at the Finviz quote table, and we can see grains are as a green as the commodities they represent.

Grains Table(Disclaimer: Past performance is not necessarily indicative of future results)
Table Courtesy: FINVIZ

The major grains are up anywhere between +2% to a little under 5%. For those living in the Midwest this might not be a shocker, as June was one of the wettest months on record if not the wettest, putting a damper on our summer celebrations so far.  And putting a damper on ideal growing conditions, where you need just the right amount of rain. To greatly oversimplify things: too little rain, and the Corn dies of thirst. Too much, the Corn drowns.

Which brings us to the current ‘too much rain’ environment, where the only things more colorful then the table above are the maps of May precipitation versus the average – with a big swath of the country in the green to dark green color representing 100% to 500% more precipitation than normal.

Perception Percent AverageChart Courtesy: NOAA

For a slightly different look, here’s each state ranked individually on the dry to wet scale (which for some reason goes up to 121?), meaning this is the wettest May on record for Texas, Oklahoma, and Colorado.

Rain RankingsChart Courtesy: NOAA

While the NOAA hasn’t released June numbers yet;  the Illinois State Climatologist says June has been the wettest in the state’s history.

Illinois Rain RecordChart Courtesy: Chicago Tribune 

If you like to hear it from the words of the people who spent time in the fields, Rosetta Capital’s Jim Green spent a great deal of time on I-80, traveling through the heartland of the U.S., and experienced some not so great crop conditions.

“I saw so much drowned out beans, windblown corn and major roads closed due to flooding in the largest corn county in the US of A! The water damage is more prevalent than not. That tells me we will have a tough time reaching USDA estimates on planted acres and projected yields. A warning has been issued that things are far from perfect and the funds are short.”

It seems Mr. Green isn’t the only one noticing these conditions, with the grain complex up sharply since the middle of June, and many markets going Limit Up today, leading the CME to extend daily limit moves for the commonly traded grains.

 

This time last year, Ag traders were looking at riding the grain market trend down, down, down, with systematic traders joining in once the trend was established. And now it looks like the tables will be turned – with discretionary traders looking at crop conditions and the recent up move as proof prices have some upside, while systematic traders are likely getting stopped out of short trades as markets like Corn break above their 50, 100, and 200 day moving average in the past 6 trading days (June 23th), setting things up for potential long trades if their models confirm the rally as an up trend.

Corn Markets moving average(Disclaimer: Past performance is not necessarily indicative of future results)
Chart Courtesy: Barchart

Of course, there’s those out there who get worried about rain causing gains, because of the old trader saying:  “Rain Makes Grain”, with the thinking going – rain can be bad for supply, but more often than not it’s a good thing, meaning more supply thanks to the rain, not less… which would make this a head fake higher. Only time will tell.

For more information on how these ag mangers trade these markets, check out our whitepaper, “Ag Traders.

Alternative Links: Diversified Hedge

Managed Futures:

Are CTAs Good For A Diversified Hedge Fund Portfolio? – (FINalternatives)

Best Assets For Your 2015-2016 Portfolio – (Seeking Alpha)

Winton profits more than double in 2014 – (CTA Intelligence)

Managed Futures May Performance – (Attain Alternatives Blog)

Regulation:

Statement of Commissioner J. Christopher Giancarlo for the Market Risk Advisory Committee Meeting – (CFTC)

Futures and Miscellaneous:

Sugar – Identifying Value Near 12 Cents/Lb. – (Seeking Alpha)

4 reasons oil will stay this cheap for years – (Fortune)

Tales of the Pit – (Futures Magazine)

Commodity In-Flows Fizzle – (John Lothian News)

Alternative Links: 10 Things To Consider

Managed Futures:

Smooth Risk – (Top Traders Unplugged)

Illinois Teachers invests in 2 managed futures strategies – (Pensions & Investments)

Taming The Markets – (FA Magazine)

Trend-followers versus managed futures – Is there a difference? – (Lakewood Views)

10 Reasons to Consider Adding Managed Futures to Your Portfolio – (CME Group)

Futures Markets:

Your Salad Lunches Are Killing American Leather – (Bloomberg)

What the (Yen) IS Going On! – (Attain Alternatives Blog)

Wall St. Sucks at Predicting Interest Rates, and so does Everyone Else – (Attain Alternatives Blog)

Hedge Funds:

The Billion Dollar Club – (Reformed Broker)

Alternative Links: Asset Flows

“And after six months of strong results after years of underperformance, managed futures strategies (which make bets on commodities and other futures contracts) [brought in] $4 billion in January alone.”

As Hedge Fund Returns Falter, Money Continues to Flow In – (The New York Times)

Performance:

2015 is unlikely to be another 2009 – (CTA Intelligence)

Macro Hedge Funds:

Macro Hedge Funds “Stinking Up The Joint” – (Barry Ritholtz)

Crude Oil:

Emil Van Essen Explains “Volatile Two Way Markets” – (Wall Street Journal)

Commodities explained: Hedging oil volatility – (FT)

Brent below $60 on US crude build, Saudi sees recovery – (CNBC)

Industrial Metals:

London Metal Exchange to Improve Warehouses to End Aluminum Bottlenecks – (Wall Street Journal)

Attain & RCM Join Forces:

RCM Alternatives and Attain Capital Management to Join Forces – (Futures Magazine)

How RCM uses education to build business in alternative investments – (Chicago Tribune)

Making It Attainable: RCM Buys Attain To Broaden Managed Futures Reach – (John Lothian)

Attain and RCM to Join Forces! – (Attain’s Alternatives Blog)