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On the Farm Supplement of The Canadian Statesman and Newcastle Independent, Wednesday, March 20,1991 3 Club Helps Farmers Study Commodities Market by Andrea Adair For almost a year, the Pine Ridge Marketing Club has been meeting monthly to discuss options and commodities. commodities. The group makes decisions decisions on what crop options to buy, when , to Duy'them and when to sell them. While members of the group are gaining knowledge knowledge and insight into commodity commodity trading, they are also having a lot of fun. , Jim Allin, who organized the club with John Finlay, Ministry of Agriculture representative representative and Cory MacDonald, MacDonald, from the firm of W. J. Thompson, said the premise premise of the club is to introduce farmers to the commodity market. "We're trying to get farmers farmers here comfortable with Jim Allin, from the Pine Ridge Marketing Club, monitors movements movements on the Chicago Exchange Exchange to assist in purchasing purchasing and selling commodity options. Mr. Allin helped form the marketing club to familiarize familiarize farmers in the area with the commodities market. He said once farmers are comfortable with the market and understand understand how it works, they can get a better idea of when to sell their crop. trading commodities," Mr. Allin said. The club is interested in five commodities: com, soy beans, wheat, hogs and cattle. cattle. Mr. Allin said these five commodities have ther most interest for farmers in the area. "The main benefit of the club is that members feel comfortable in trading options options and using them as an alternative marketing technique," technique," he said. Members are beginning to feel comfortable with the terminology of the market and are becoming more familiar familiar with-reading technical technical and fundamental analysis analysis of options. By studying this, Mr. Allin Allin explained, farmers will get a better idea of when to sell their crop on the market. market. He explained that ideally farmers should sell at the high end of the market. "Often farmers sell at the end of the price range. It's hard to know when to sell unless you know the market," market," he said. When the club formed, the members each contributed contributed $200. The money was put into a bank account to enable enable the club to have funds to do trading. Mr. Allin explained that buying and selling options resembles stock market trading. That which is being traded, for all intents and purposes, is paper. In addition to learning about options, the club members members also enjoy the social side of meeting. They get together once a month. At.,,that time, members members break into different commodity groups, examine what is happening with that commodity and then report back to the rest of the group. Members- then vote on what the club should do. After After the decision is made, Mr. Allin contacts his broker to make the purchase. When an option is bought, he explained, the club puts in target prices so that when the commodity reaches that price, the broker broker immediately sells. Mr. Allin monitors the daily market activity of the Chicago Exchange, the market market where they do their buying. buying. A computer which re ceives its information by satellite keeps him informed of action on the Chicago market. There are over 100 pages of information on the" system. system. There are displays and charts which include weather weather activity, and price chang : es in commodities that he can examine. "There are a number of strategies you have to get into," he said about playing the market. He stressed that the risks involved are limited to the amount of money put in at the beginning. Mr. Allin says he has fun playing the market and explained explained that he has been involved involved with it for a number of years. The number of members in the club is limited because because the more people involved, involved, the harder it would be to come to a consensus on what options should be purchased. purchased. But interest in marketing clubs is forming in other areas areas of the province. "He noted that he spoke to a group ot people interested lay spoke to people in the commodities is growing, and in starting a club in Brigh- Newmarket area. so is the knowledge of the ton recently, while John Fin- Interest in options and farmers involved in the club. 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