DEC Commodity Program Stumbles

May 4 2007 | 12:12pm ET

DEC Capital’s Commodity Alternatives program lost its footing in April after jumping out to an 11.19% gain through March. The discretionary agricultural futures program was down 7.8% last month, and is up 2.6% for the year with some  $17.3 million in assets under management as of the end of April.

“A USDA crop report issued on Friday, March 30, forecast record corn supplies in the 2007 crop year, causing limited down moves in corn on two successive trading days, as well as related volatility in wheat and soybean prices for several days,” according to a memo sent to investors. “DEC was positioned going into the report with bearish relationship strategies in all three major grain markets.”

Then, in the third week of April, there was an abrupt wheat freeze whereby wheat prices shot up and the portfolio incurred sharp losses in a short wheat strategy as well as the bearish relationship spread, according to the firm. “We reacted quickly, closing out wheat options and radically reducing position size. Simultaneously, the supply situation in corn continued to look inflated, and we closed out the corn spread before giving back all of the year-to-date gains.”

The firm added that research “still strongly suggests high prices in corn and beans in deferred crop years” so it is building a soybean strategy and plans to re-enter the distant contracts in corn, with an underlying relationship bias between the two in favor of the beans.


In Depth

Q&A: Quad Advisors’ Borish Is Looking For Real Traders, Not Index Huggers

Aug 20 2014 | 1:43pm ET

Peter Borish, who served as founding partner and director of research at Tudor Investment...

Lifestyle

Nicky Hilton To Wed James Rothschild

Aug 20 2014 | 5:23am ET

When it comes to husband-material, socialite Nicky Hilton is sticking with finance...

Guest Contributor

Looking Ahead: What’s In Store For Managed Futures?

Aug 22 2014 | 12:52pm ET

The last five years were phenomenal for investors in equity indices. Will the next...

 

Editor's Note

 

Futures Magazine

PREVIEW July/August 2014 Cover

Inside Futures' 500th Issue

The July/August 2014 issue is our largest in years—filled with the best trading strategies and stories from 43 years of being the primary publication for commodity, stock, options and forex traders.

The Alpha Pages

TAP July/August 2014 Cover

Real talk on alternative investments, business & finance

The Alpha Pages Editor's Note