Forecast Trading Group

Forecast Program

Minimum Investment
Management Fee 2.00%
Performance Fee 20.00%


Forecast Trading Group, LLC (FORECAST), is a Commodity Trading Advisor specializing in trading weather-related commodity products. Mr. Brunn is a registered Principal and Associated Person of James Brunn Associates, Inc. since November 1996. Mr. Brunn's career has spanned over 20 years in senior management in foreign exchange, including Chief Dealer of Royal Bank of Scotland, CIC, Banque Francaise du Commerce Exterieur (BFCE), and developed a proprietary trading desk at Standard Chartered Bank. Mr. Brunn was responsible for the supervision and risk management administration of other traders employed at the banks, including an option desk. He was responsible for strategic trading for the bank and strengthened his risk management procedures that he utilizes today within FORECAST. Mr. Brunn began his career at Lloyds Bank Plc. (Oct. 1978 to May 1985) where he established the EMS trading desk. In that position, he was also responsible for the spot and forward books of numerous European and commonwealth currencies. While at Lloyds, he spent time on the floor of the New York Futures Exchange, as a registered floor broker. FORECAST uses short to intermediate term positions to benefit from price movements in markets such as natural gas, coffee, soybeans, sugar and many other weather sensitive commodities. Looking at what "history has to say" is also extremely important. For example, Hurricane Michelle hit Cuba in November 2001, causing billions of dollars of damage to crops and homes. The last time this happened was during the fall of 1984 when sugar prices soared in November. While many traders were short sugar and felt that the world had enough to go around, FORECAST was aware that A) There was a heavy net short position of funds in the market who might have to liquidate these positions; B) That world buyers of sugar depend more on Cuba's shipments during the late fall and early winter; C) The technical nature of the market might create a short squeeze. Sugar prices rose 12% in Michelle's aftermath.. There are two primary trading seasons, each encompassing specific markets where weather is a key factor. Grain, coffee and cotton markets are traded May through August. Energy complex and tangible commodities, such as orange juice, are traded between November and March. This does not however, preclude trading these markets during other months. Being able to access these markets in other parts of the world, gives FORECAST another huge advantage, since many countries outside of the U.S. are not sophisticated enough to understand how weather works. In addition, there are weather maps coming out all the time and if there is a change in the forecast, FORECAST can get a jump on the competition before our markets open in the U.S. FORECAST's trading approach also includes seasonal "neutral modes" which may indicate that no position is appropriate in a particular contract or contract group in an attempt to preserve capital. Position size is a dynamic function of volatility and price trend of each market and may vary significantly from one trade to the next within each market. The trading program is diverse and invests in both futures and option contracts. Options are frequently used to take advantage of intermediate term price movements. Option contracts are predominately purchased (not sold), so that the level of risk is clearly defined at the onset of the trade. For example, solar cycles and sea surface temperatures may give clues to longer-term implications for freezes and droughts in certain parts of the world. Instead of jumping head-first into a futures position, FORECAST may determine that cheap out of the money call or put options have huge potential, with limited risk, especially if a major weather development does result in a sudden spike in prices. Trading options allows "more staying power" in situations where we are "too smart" and know something that the market does not yet know.