danielosborne's  Instablog

Last week, wheat futures jumped 16% - the most since the five days ended June 15, 2007 thanks to dry weather threatening to damage wheat crops in the USA and Russia - two of the world's three biggest wheat producers this year. However, both Russia and the Ukraine are predicted to get showers from now and into tomorrow - helping to ease wheat prices in early futures trading this week.

Nevertheless, conditions reportedly remain dry in Kansas, a key winter wheat producing state in the USA, plus Australia. Given that wheat has yet to be harvested along with memories of a devastating Russian drought two years ago which caused a big upheaval in the grain markets, commodity traders should be checking their weather forecasts and prepare for a repeat upheaval. Moreover, wheat supplies are said to already be tight as Western Europe has already suffered significant winter damage to its wheat crops.

In other words, food prices for products that contain wheat may be rising later this year but for stock investors or traders looking for a way to profit from rising wheat prices, there are a couple of options besides betting on wheat futures.

For starters, the Teucrium Wheat Fund ETV (WEAT) from Teucrium Trading, LLC is a commodity pool that offers unleveraged direct exposure to wheat without the need for a futures account (Note: Teucrium Trading, LLC also offers a corn fund, a soybean fund, a sugar fund, a crude oil fund and a natural gas fund). The Teucrium Wheat Fund ETV (WEAT) has a market cap of around $4.6 million while on Friday WEAT rose 4.46% to $20.59 but its still down 8.1% since the start of the year and down 16.2% since last September.

Less adventurous investors could also invest Archer Daniels Midland Company (ADM), a large cap stock involved in procuring, transporting, storing, processing and merchandising agricultural commodities and products like wheat. On Friday, Archer Daniels Midland Company (ADM) fell 1.21% to $31.82 but ADM is still up 11.3% since the start of the year, up 1.8% over the past year and down 13.8% over the past five years. Archer Daniels Midland Company (ADM) also has a forward dividend of $0.70 for a dividend yield of 2.2% - not bad in today's near zero interest rate environment.

Finally, the Market Vectors Agribusiness ETF (MOO) offers investors exposure to broad range of agribusiness stocks just like Archer Daniels Midland Company (ADM). On Friday, the Market Vectors Agribusiness ETF (MOO) fell 1.20% to $46.12 and is down 2.2% since the start of the year, down 13.2% over the past year and up 13% over the past five years.

Of course, it's important to remember that overly dry or wheat weather in key agricultural regions around the world could also impact the supply and hence the price of other agricultural commodities. That in turn will impact the price food and restaurant stocks pay and if they cannot pass on any price increases to customers, they will need to absorb it at the bottom line.

This means it's a good idea to check the weather reports this week plus keep an eye on our NextCandle.com stock forecasts for agricultural and food related stocks as any dramatic weather changes that impact the supply and price of wheat may also be felt fairly quickly in the markets.

NOTE: THIS PIECE WAS JUST POSTED ON THE NEXTCANDLE.COM BLOG.

Most investors and traders alike are probably glad that last week is over with given how volatile the markets were over renewed concerns about Europe as well as the lukewarm response to the much hyped Facebook (FB) IPO. In fact and while Facebook (FB) closed slightly higher, a number of its social media peers were sinking while reports of bank runs in Spain following the downgrade of 16 Spanish banks by Moody's has European depositors and hence investors on edge.

Nevertheless and with all of the above uncertainty in mind, NextCandle.com gave the following stock predictions before the market opened on Friday:

• Linkedin Corporation (LNKD) had a 74% probability of making a lower low.

• Quepasa Corporation (QPSA) had a 71% probability of making a higher high.

• Lloyds Banking Group PLC (LYG) had a 59% probability of making a lower low.

And the Results when the market closed on Friday:

• Linkedin Corporation (LNKD) opened higher at $106.17, had a daily trading range of $96.60 to $109.50 and closed down 5.65% to $99.02. Specifically, Linkedin Corporation (LNKD) spiked higher in morning trading but by 11.30 am it was plunging lower only to rise back up to its opening price and then slowly trend lower for the rest of the trading session.

• Quepasa Corporation (QPSA), which owns a Latin America focused social media site just like Facebook (FB), had a more interesting and wild ride for the day. After closing at $3.91 on Thursday, Quepasa Corporation (QPSA) immediately opened at a higher high of $4.30 and stayed above its previous close until about 11:30 am when it began sinking. By the end of Friday, Quepasa Corporation (QPSA) had a trading range of $3.06 to $4.40 for the day and it closed 21.74% lower at $3.06.

• Lloyds Banking Group PLC (LYG) opened at a lower low of $1.61, had a daily trading range of $1.60 to $1.64 a share and closed down 4.74% to $1.61. My guess is that UK based banks like Lloyds Banking Group PLC (LYG) have some exposure to the real estate bubble that has long sense burst in Spain along with the mess in Greece.

Of course, traders and investors alike should expect extra volatility with social media stocks with the Facebook (FB) IPO and with European banking stocks as the crisis in Europe deepens. Nevertheless, Next Candle's stock forecasts for Linkedin Corporation (LNKD), Quepasa Corporation (QPSA) and Lloyds Banking Group PLC (LYG) were right on the money despite considerable market uncertainty.

NOTE: THIS PIECE WAS JUST POSTED ON THE NEXTCANDLE.COM BLOG.

The long awaited Facebook IPO is about to debut but here are ten good reasons why investors should not like or befriend Facebook stock:

1. Remember MySpace and Friendster? They were among the original social networking sites until (of course) Facebook came along and became the social networking site. I should note that Friendster is now headquartered in Malaysia because it still has a wide following in emerging markets like the Philippines but it's reinvented itself as a social gaming site while MySpace was recently sold for $35 million, far less than the $580 million News Corp. paid for it in 2005.

1. Is Pinterest the Next Facebook? With the decline of MySpace and Friendster after the rise of Facebook in mind, Pinterest is has the potential of being the next big social networking site as Wikipedia calls it a "pinboard-style social photo sharing website that allows users to create and manage theme-based image collections." In March, it became the third largest social network in the United States, surpassing Linkedin and Tagged, plus it has just raised $100 million on a $1.5 billion valuation.

1. There Aren't Enough People to Sustain High Growth Rates. Planet earth is estimated to have at least 7 billion people with 1.3 billion of those people living behind the "Great Firewall of China." Facebook is estimated to have 900 million active monthly users. Granted and in theory, there is still plenty of room for growth BUT at some point there will simply not be enough people left who want or need Facebook accounts.

1. Facebook's China Problem. For the most part, few Chinese can access Facebook thanks to the "Great Firewall of China" plus homegrown Renren (RENN) may reach 200 million members by the end of the year. And if Facebook were to do a deal with the Chinese government in order to gain access to the Chinese market, the backlash abroad would probably not be worth it. Moreover, other countries like Vietnam have periodically tried to block their citizens from accessing sites like Facebook that lie beyond government control.

1. Krispy Kreme, Crocs & Other Fads Have Trouble Making Money. Krispy Kreme Doughnuts (KKD) and Crocs (CROX) are two popular brands with a history of troubles after IPOs. Specifically, Krispy Kreme Doughnuts (KKD) faced earnings declines, concerns over its rapid expansion and an accounting scandal while Crocs (CROX) faced competition from knockoffs and has even become the butt of jokes and satire.

1. Facebook Privacy Concerns Have Not Gone Away. Despite efforts to address privacy concerns, a recent poll found that only 13% of respondents trust Facebook "completely" or "a lot" when it comes to keeping their personal information private while 59% said they trust Facebook "only a little" or "not at all."

1. Society Moves Away From "Reality TV" Lives. While posting status updates or tweeting about one's every move or thought is popular now, society and culture could change where people move in the other direction and demand some sort of privacy in their lives. That may not mean giving up social networking sites altogether but it would mean spending less time on them.

1. Facebook's Revenue Model is Based on Advertising. Advertising accounts for 82% of Facebook's revenue for the latest quarter with the rest coming from the purchase of Facebook "credits" in order to buy virtual goods like chips in "Zynga Poker" or cows in "Farmville." However and last year, only 15 million Facebook users or roughly 2% of the total bought any type of credits at all. Moreover, advertising on the screens of mobile phones and other devices generally does not make much sense as the screens are too small. And while Facebook is apparently working on trying to find away around this and have ads - don't expect any such move to be embraced by Facebook users and for that matter, whatever new competition comes along in the future.

1. Management is Still Young and Inexperienced. Zuckerberg may be a rock star right now but he and nearly all of Facebook's senior staff are still fairly young to be running a company with a multibillion valuation and a global reach. There is also a question regarding control and how decisions are made. Case in point: Zuckerberg spent $1 billion on Instagram (apparently without consulting anyone) while in contrast, Yahoo! paid $35 million for Flickr in 2005 and its now one of the most popular (and hence valuable) websites in the world.

1. Riches Will Change Zuckerberg et al. No matter how much Zuckerberg and other Facebook insiders say that money won't change them or how Facebook is managed, it will. Some will inevitably want to cash out and enjoy the good life while other insiders and the company itself will change in ways we can only now imagine.

In other words, Facebook may already be near a zenith with its IPO. In other words, Facebook is definitely a stock that investors and traders alike will want to keep an eye on by having it listed on NextCandle.com's My Portfolio page.

NOTE: THIS PIECE WAS JUST POSTED ON THE NEXTCANDLE.COM BLOG.