http://www.agrimoney.com/news/us-winter-wheat-makes-worst-start-on-record–5165.html

“US winter wheat makes worst start on record”

This news is very useful I think. As the title says, winter wheat meets the worst start. According to the news, it says that because of “century drought”, “poor stands and wind damage”, and “better for soft red winter”. Thus we could make some predicts that price of wheat may show a upward trend because of lower supply. And the exporter may set some barriers when trade in the world.

http://www.agrimoney.com/news/wheat-prices-rise-despite-russia-victory-in-tender–5163.html

“Wheat prices rise despite Russia victory in tender”

This news shows respond to the first one, and my prediction. There’s some more information in news. Such as, “Egypt is the top importer of wheat”, and “the shipments took the EU total so far in 2012-13 past 5m tones, and nearly 300,000 tonnes above the level a year ago”.

Almost forget the blog entries this week. Fortunately I remembered it.

The right thing:

I would think I did two things right last week. The first thing is keep spread in soybean. I thing the price for soybean in the future will narrow. And the price data of soybean shows more stable, compared with wheat and corn.

And I would think the second thing I did for the past week is that I offset my positions in wheat and corn on Tuesday, the day after Sandy came in NewYork. Because I think the Sandy would make the market fluctuate and unpredictable. Wheat and corn are complicated in world market, such as Thai’s policy, Ukraine export policy, the influence of Sandy and complicated weather in China. China is one of the largest demand in the world. And recently it shows different weather in Southern and Northern part, according to the previous observation. I’m confusing about the market trend thus I choose to stay in soybean. Because soybean would not be influenced immediately.

The wrong thing

I didn’t buy or sell any new contract last week, just hold the contract I have two weeks ago. I thought that I could not handle the effects of Sandy. But then I lost some chances to make money from short position. And when the report comes on Friday, I could not find the respond point in trade exercise.

But I felt confused when the contract would finish pending after I click it. Sometimes I saw they show at the same day but sometimes tomorrow..

Honestly speaking, my forecast this week is similar with last week.

The corn price would still show a downward trend, because of the same reason. But the soybean price may go up. Last week I realized the influence from larger plan of soybean in the coming year but ignore the demand side. This week I search for more information. The plan of soybean would be larger next year, but the demand – especially the importers, also increase. Thus the demand still tight in this non-harvest season.

The wheat price may trend down. But I’m not sure about that. The reference I search and news shows that the price of wheat would fluatuate. So the better strategy I think is to hedge on the wheat market because the price would narrow.

1.http://www.agrimoney.com/feature/egypts-wheat-buyers-should-be-careful-what-they-wish-for–174.html

Story about the Ukrain’s export barriers and Egypt

This news talks about the Ukraine set an export barrier to protect their domestic suppliers, which would make their buyers, including Egypt suffer more in lack of suppliers. But in long trend, the Ukraine would lost the reputation and then they need to save themselves through a bigger lost. The article also sets the Russia as an example to prove this point. It is said that the price in Russia now hit the high post- Soviet, and the Russian need to keep their export amount stable even they suffer from drought or are predicted to be importer in next year.

2.http://www.agrimoney.com/news/top-exporters-grain-stocks-to-fall-to-17-year-low–5147.html

“Top exporters’ grain stocks to fall to 17-year low”

It is a story about stocks of grains. It shows that the stock of main exporters of grains, such as Canada, Europe, and so on hit hte 17- year low. That would lead the supply of grains meet the tightest condition and up the price of grains. It also points out that the price of corn would be affected because of the lower production and the price of soybean would be lower because of the expectation of higher production. The grade of corn would be lower and soybean would be higher.

3..http://www.vancouversun.com/news/national/Ontario+worst+hurricane+Sandy+Canadian+Hurricane+Centre/7458687/story.html

“Ontario to get worst of hurricane Sandy: Canadian Hurricane Centre (with video)”

Yesterday night, 8:o0 p.m., there was an alert for the earthquake in the ocean. And here is a report for hurricane. That means on the east coast should focus on the earthquake and the west coast need to pay attention to the typhoon and hurricane. This weather report may influence the food market. It may not affect the food market directly, but the cash market, the economic in North America would be affected. And because of the potential economy lost in society, the whole market price would go up. That would make the price more  complicated to predict.

And hope everyone notice the safety.

I’m so happy to see my equity balance eventually went up in recent weeks. Things seem to be better and better and I begin to know how to manage my trading activity. That makes me feel happier even I didn’t get a big profit.

And I realized I didn’t show the date of contract in my previous blogs, I think that’s not a good method to discuss because at the same time, the contract delivery at next year and at two years later would be different.

The “right” part – short on corn and soybean

I made a prediction last week said that the price of corn and soybean would go down because of the big profit in two weeks ago. And the case for corn shows right in this week – profitable in short contract of corn for Dec. 2012 and 2013.

I hedged on the corn – though the price of corn on Dec would down and price in next year would go up, and the market price different between them would narrow. But the long contract shows loss yesterday because of fluctuation of price. That’s the same as my prediction.

The ” wrong” part — short on wheat

Wheat price showed downward in the past week so I lost profit at this part. But in total, I gained the positive profit in the past week.

As the cool resource and four references discuss, I would think that in next week the price of corn would tend to be eventually downwards, wheat would rise up and soybean would go down.

The big jump up happened last week resulted in big gains of long position holding traders. This week some of them would choose to quit out and then price would be driven down. That will be the soybean case. What’s more, the released report of broaden plant in U.S. would form a prediction of surplus in next year and then the price of soybean would be driven down.

The corn price would be fluctuated. The corn case should be the same as the soybean case. However, the supply of corn is not enough because of big drought, and the demand of corn shows a weaken trend but still strong, that will make the corn price up and down at a period.

The wheat case also shows similar aspects with soybean case. But it should be noted that the ninth exporter – Ukraine shows a downward supply trend, which means that the supply in the world market would be lower. Then the price of wheat would go up in some periods. However, since it went up so much in previous week, this week the price would show down but the whole trends is upward trend.

Reference:

1. http://online.wsj.com/article/BT-CO-20120810-710059.html
2. http://online.wsj.com/article/DN-CO-20121019-011230.html
3. http://www.grainews.ca/news/u-s-soybeans-fall-wheat-pares-gains-on-macro-worries/1001782004/

http://www.grainews.ca/news/u-s-soybeans-fall-wheat-pares-gains-on-macro-worries/1001782004/

This article is so cool, since it contains lots of information:

-soybean future fell last week

-wheat and corn future up last week

-wheat and corn are riskier

-corn price experienced the largest weekly rise since august

-wheat rose the biggest advance since July

-soybeans were pressured after report of larger plant of soybean

-most traders and analytics focus on the weather condition of South America

-Ukraine’s supply and demand has big influence on price of future market

In this article, the writers also use microeconomic and macroeconomic concern to explain what happened and why it happened. It also pointed out that because of the centuries drought in America, the demand side settle their hopes on South America, Brazil and Argentina. If there will be bad weather, then the shortage in future could be a reasonable prediction.

I would evaluate the past two weeks with a keyword as “lucky”.

The first week, I used three contracts – one is short on wheat, one is long on wheat, and one is short in soybean. At first, I check every day and realized things are good. Price for wheat went up so I lost some money, but not big and really small, and I also got some money, seemed bigger. I thought the price of wheat would fluctuate and use hedge could help me eliminate some risk. And the relatively stable price of soybean could help me lock some uncertainty level. I thought I could stay there for more profit. And later I was busy with midterm and thought there was a week off for blog entries. And weekend came, all trades are closed at weekend. So I just let them there without handle.

After midterms, I checked my account details and find there’s 1000 lost. Compared with the biggest lost I met in the third or fourth week – about 7000 dollars lost in only one week, I would think this lost is not bad and I was lucky enough.

Actually, after these lucky two weeks, I realized that hedging is a good option when I could not settle down my belief of the market. After I realized in the biggest lost week that the market could change faster than I imagined, I try to search more information to settle down my belief of price. But what we learn from the course – “future market is hard to predict” block me when I try to make a prediction. However, the agri-market looks like competitive market because large amount of goods, I would think if I could search more information, I could make some predictions for the market trends.

Whatever, thank god for lucky two weeks, and thank hedging for protecting me from big lost.

http://www.cmegroup.com/education/market-commentary/ag/2012/10/mid-session-soybean_1207.html

Considering I would like to long or short soybean in the next week. My cool resource this week is connected with soybean. It seems an introduction of recap or report.

From this recap, it could be concluded that the soybeans volumn is not big. And the price of soybean stays stable for different closing date. If there is an increase, the amount of increasing is small. From this news, it is noted that the China’s purchase of US soybeans for 2012/13 season. It’s helpful to support the market, but also a signal of demand change in soybean market. It would help the market to be more persuasive for speculators.

But for a long time, the soybean price seems more stable than corn and wheat market. So it’s a good option to hedge risk in future market.

For the corn, I would think the price of corn will continue to show the downward trend. Last week the corn price shows limit up and drive the price of wheat, soybean and oil go up. That’s what most recap shows a “bearish” force. The market pushed lower because the harvest season corn in the next few weeks. It seems that short a corn would be profitable. But I would like to think offset corn contract for one or two weeks and change to know some more news for soybean market.

For the wheat, I would think the price would be a little complicated. Since the past week, close price was a new low for speculative sellers were active late. Then the corn market and corn market would influence the wheat market because of the high relationship. And the weaker of US dollar would also influence the wheat price. I would think that the wheat price fluctuate during a week. But downward trend would persuade me to keep short.

For soybean, that’s a new market for trade game. I find some data and think that the soybean market is not so activated as wheat and corn market. Perhaps that’s because soybean is not a great production amount.