CORN FUTURES vs CRUDE OIL FUTURES Daily for 7 Years
Would anyone believe that these two markets are somehow this intertwined?
Corn and Crude are like two people walking across a field tied together with a rope. Sometimes one gets away from the other and then they come back together and the other one might stray away.
Using this chart, the decline in Crude Oil could have been telegraphed by the drop in Corn.
Tim
Wednesday April 29, 2015 8:38AM EST ZC1! 363'6, CL1! 56.81
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The CORN AND CRUDE CORRELATION CONTINUES...
March 31, 2017 5:03PM EST
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A-shot
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Interesting!
IvanLabrie
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Tim, I think it's time to invoke this chart.
Looks like Corn is making a move up, and so is crude oil...whereas EURUSD is lagging it.
Kumowizard
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The links: both are commodities :-) but maybe stronger link is bioethanol production (from corn as a base product), which is used as alternative fuel.
Anyway, I still think it is better to always look separately on each products and each charts. For example there is Wheat and Corn, which ended in a bearish wave, while Soybean is not following them at all. Sometimes correlations work, sometimes they don't.
timwest
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Thanks for your reply. Well said @Kumowizard. Of course we always want to have rationed, logical analysis on our investments. Correlations come and go, indeed. Sometimes looking at the "Big Picture" is valuable too. How you go about putting trades on with this "pairs" analysis is the key to this being successful analysis.
This is simply a picture of crude oil that I think 99% of people would not even imagine was going to look like this. If you asked the average person on the street if they thought the price of gasoline was nearly identical to the price of corn over the past 7 years, they would be quite shocked, especially given all of the evening news discussing oil production, the strains in the Middle East, and all of the stress people feel about the price of oil (when it was high).