Blogging was temporarily paused last week due to the preparation of midterm. So, I am back again.
The most significant episode during the past two weeks was the time when the USDA released the crop production report on the 11th of Oct. I woke up seven plus in the morning (9am in Chicago) to check the crop supply forecast. It stated that the corn yield forecast stands at 10.7 billion bushels, which is slightly lower than the September prediction and 13 percent down from 2011. The estimate depicted the lowest production in the US since 2006. In addition, USDA predicted that the US corn inventory was 619m bushels, which is the lowest in 17 years. However, the USDA refrained from making further cuts for the prediction of the domestic consumption of corn.
http://usda01.library.cornell.edu/usda/current/CropProd/CropProd-10-11-2012.pdf
http://www.agrimoney.com/news/grain-prices-rise-after-us-says-stocks-to-stay-low–5092.html
These changes in supply and demand of corn suggest that the price of corn was going to shoot up. Hence, the corn price almost underwent a ‘limit-up’; the opening price was 736.50 cents per bushel and the closing price was 773.2 cents per bushel (the increase was 36.7 cents per bushel or 4.9%).
I bought a few contracts of corn right when I saw the news. However, due to the lag of TradeSim, my orders were not validated till a few hours later. Thus, I did not make much money. BOooo…~
You did a great job on analysing the corn future market during the midterm week. The USDA repot had major impact on the short-run corn price. I missed the news and I have taken a short position in the corn future market when USDA released their report. As a result, I lost a lot of money on Thursday in that week. However, the corn price decreased after Thursday and I earned my money back. I think the corn price may go up next week because the excessive rains in parts of southern Brazil and Argentina delayed their local corn plantings. But, I am not sure about it.