is there any company that will do my futures trading for me

[steven]

I am wondering if there are any companys that would let me give them some funds and they would take them and trade them in the grain/oilseed and livestock markets for me. allmost like my own mutual fund except it would be a grain and livestock fund.

[melvill]

Your message isn't exactly clear. Are you (1)looking for a company, presumably a brokerage firm, that will accept cash from you to trade and try to make you some money in a speculative trading situation. Is that what you're proposing? Or (2) are you proposing that this (brokerage) firm would know your farm situation and place hedges for you whenever they thought it was appropriate? In my opinion, if you're proposing the first (speculative) situation, you're taking on a significant amount of risk. If you'd like to play that risk-reward game, you're likely far better off to invest your money in a mutual fund that speculates in futures and/or options. First of all, mutual funds in that business use very sophisticated technical analysis methods and have enough staff to carry the analysis out. I doubt if there are very many brokerage firms with that level of resources available or the time to put into it. Of course, there's always someone out there that could fool me. I also wonder if any of the brokerage firms that I know would take your investment to trade under the conditions that it seems you are interested in. Situation (2) would also put a broker in a difficult situation, too. They'd have to know your farm very well and they'd have to understand your marketing goals thoroughly. That would take considerable time on their part to put in place. I wonder whether they'd want to tackle that. Personally, I've found that making other people's decisions for them is a very dangerous situation. It doesn't take long to go from a hero to a bum! If you're looking for a list of Alberta commodity brokers, go to <http://www.agric.gov.ab.ca/newsletters/market_clippings/index.html> . Then click on 'Picking a Commodity Broker.'

[charliep]

I agree with Lee that it is very risky to turn over your trading activities to someone else - particularly on the speculation side. Futures trading is a leveraged type investment (you put up 5 to 10 % of the value of the contract) which means you make or lose money on your original investment very quickly. Options are less risky in that you know your cost up front but are an expense to your business with the recognition you may spend the money with no return. In this kind of risk situation, the person who stands to make or loose money should stay in complete control of trading decisions. The hedging side of the coin is a different matter. My preference is still to have the farm manager in control. There are companies, ourselves included (Pro-Ag), that will take a more active role. It is very important to have clearly defined rules in this relationship so the company on the other side is just executing your wishes/risk management plan and is in no way involved in any form of speculation. It also requires extremely good communication so everyone knows exactly what is going on. A knowledge of all aspects of your business (including financial) is critical. On the risk management side, is this a service that the farm community would use? In an ideal world, what service would a consultant/risk management specialist provide the farm community?

[hubar]

I have found it difficult in the last couple of years to find a good course with good practical application of the futures market, using options, etc. (not the higher risk speculative). I would like there to be someone that could 'hold my hand' so to speak, for a year, with good communication as you suggest, to learn how to use the market to enhance our grain marketing.