INTRODUCTION TO THE SEVENTH EDITION

It is impossible to predict the future. That is why we rely on seasonal and historical analysis to help understand, or better yet, to remind us what price trends have occurred in the past and how often these trends perform. These patterns typically occur as a direct result of perennial supply and demand changes year after year. Every year has differences, from changes in monetary and fiscal policies to global macroeconomic situations to presidential election year cycles to extreme weather and other exogenous events.

2013 promises to be a dynamic year for commodity markets. No matter which party is elected, energy reform will likely be on the slate. Currently, we lack a national policy on “fracking” procedures, the process by which water and chemicals are injected into the earth to extract oil and natural gas. As of June 2012, policy decisions are in individual states' legislative hands. If we do see a shift toward more cleaner burning fuels, then natural gas may see ramped-up production, creating a shift in fossil fuel demand.

The first half of 2012 left the U.S. in a serious weather situation, wreaking havoc on farmers and ranchers. Earlier than normal hot and dry conditions reduced yields in corn and soybeans as well as creating massive wildfires throughout Colorado. The global economy, hurt by a European debt crisis and economic contraction in China, was partially to blame for decelerated U.S. economic growth. As a result, in June 2012, Ben ...

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