Summary

The Hawkeye Spread Program of Four Seasons Commodities Corporation uses supply and demand analysis and seasonal trend analysis, among other strategies, to capture profits in the agricultural futures and options markets. The bulk of the trades in Hawkeye accounts are spreads, and strategies are generally medium to long term in nature. The trading method is entirely subjective and based on Mr. DeCook's life-long experience in both the futures and cash agricultural markets. FSCC looks at factors that affect the supply and demand of a particular commodity in order to predict future prices. As an example, some of the fundamental factors that affect the supply of a commodity (e.g., corn) include the acreage planted, crop conditions such as drought, flood, and disease; strikes affecting the planting, harvesting, and distribution of the commodity; and the previous year's crop carryover. The demand for commodities such as corn consists of domestic consumption and exports and is a product of many things, including general world economic conditions, as well as the cost of corn in relation to the cost of competing products such as soybean meal. In addition, FSCC reviews historical and seasonal patterns which may indicate the direction the market may move in the future. The trading principles and experience of FSCC are factors upon which it bases decisions concerning the percentage of managed assets to be used for each commodity traded and the size of the positions taken or maintained. FSCC may also decide to increase or decrease the size of a futures position (long or short) from time to time. Such decisions require the exercise of subjective judgment and include consideration of the volatility of the particular futures market, the pattern of price movement, open interest, volume of trading, changes in spread relationships between various contract months and between related commodities, and overall portfolio balance and risk exposure.