Week9: The Road Ahead

Based on a technical analysis, soybean future price has a Head and Shoulders Pattern. The future rises to a peak and subsequently declines. The second peak following after the first decline is above the former one and soybean future price declines again. It finally rises again, but not as much as the second peak, and declines. One huge and two side peaks looks like a head and shoulders. There should be a head when the price hits $1480, but it kept declining. This huge decline was due to China’s cancellation. China canceled about 600,000tonnes of US soybean. Favorable weather forecasts large soybean production in Brazil and Argentina, the world’s second and third largest soybean exporter.  USDA crop report’s soybean estimation is also higher than expected. It is forecasted that the soybean market will keep being bearish following week. Corn market will be little bullish as the US government decided to maintain its mandate to add corn ethanol to motor fuel. However, fiscal cliff in US will possibly weaken agricultural demands and dampen any bullish signs on the grain markets. I will try to offset the positions I have, not getting any new contract.



Week9: What went wrong


Date In Date Out Initial Position Offset Position Price In Price Out Gain
*Nov 06 Long (S2X) Liquidated $1519 Liquidated Liquidated
*Nov 06   Long   (S3F)   $1514    
Nov 14   Long


Nov 14   Long


Nov 14   Long


Nov 14   Long




Another big disappointment came up this week. Soybean futures dropped sharply again. I expected some bound effects of huge decline in soybean future prices due to USDA crop report. Strong global import demand was also predicted to raise soybeans. Soybean consumption of China, which is a big importer, has been increasing as urban population and pork consumption are getting higher. US is the only one large global exporter of soybean until South America will harvest it early next year. That is why I had no doubt at all that soybean future would jump. With 2 long positions of soybean from the last week, I took two more. I planned to buy at low price and sell at high price. I also bought two corn long contracts. Little bullish sign was shown on soybean, but it was not enough to recover huge decline from the last week and it has tumbled again this week. When I went market in, soybean future was $1514, but now it is $1383.25; $6537.50 has been lost for one contract. One of them was liquidated and I also got losses from new contracts. Corn futures didn’t change much, but declined. I could not offset any positions this week due to significant losses.

Week9: The Cool Sources

1)      Manitoba Co-operator


It is another website providing daily agriculture news. This is where I got information about China’s 600,000 tonnes of US soybean cancellation and fiscal cliff.

2)      Agriwatch


This website is made by Indian Agribusiness Systems Pvt.Ltd to support all people in the agribusiness sector.  Information on the website can be used in the agribusiness business sector such as farmers, traders, processors and suppliers of agricultural commodities. Valuable analysis is also provided to the trade participants to help them when they make a decision to take their contracts.

Week8: Cool Source


I am more interested in technical analysis since after Andrew explained the analysis on Wednesday. I found a useful website for doing technical analysis. This website includes all basic steps to do technical analysis and information how to read the chart. I hope this website will be useful for you guys too! Good luck on the following week’s trading!


Week8: The Road Ahead

Little bullish future prices are forecasted in all 3 grains: Corn, wheat and soybean. As soybean has been decreasing for several weeks and dropped sharply on Friday, I predict that there will be a bound effect. I also believe that strong global import demands will raise the soybean price. US is the only one large global exporter of soybean until South America will harvest it early next year. China, a big importer, will increase their import as its urban population is getting bigger and pork consumption becomes higher. Soybean consumptions also increase as well as corn because these grains are feedlots. Wheat’s substitution relationship with corn will push the wheat future price. However, these bullish market forecast will be dampen due to high estimation of soybean and wheat and better weather conditions in other soybean exporting countries such as Brazil and Argentina. Therefore, I forecast that corn, soybean and wheat future will increase the following week, but increases will be small.





Week 8: What went wrong and right

Date In Date Out Initial Position Offset Position Price in Price out Gain/Loss
*Oct 23 Nov 06 Short


Long $865 $874.25 -$463.50
*Oct 23 Nov 06 Short


Long $874.50 $890.50 -$801
Nov 06 Nov 09 Long


Short $874.25 $902 $1386.50*3 =4159.5
Nov 06 Nov 09 Long


Short $890.50 $901.50 $549*3


Nov 06 Nov 09 Long


Short $741 $752.50 $574
Nov 06 Nov 09 Long


Short $741 $754.25 $661.50
Nov 06   Long


Npvp6   Long




Many things have happened this week; 6 longs of wheat, 2 longs of corn and 2 longs of soybean. This week was the first time I got more than 2 contracts of each grain and took positions of all 3 grains. I achieved huge gains from wheat and corn but have been losing a lot from soybean. I expected that USDA crop report would result in a rally in the market of 3 grains due to low supplies from the drought. Corn future was a bit higher but wheat and soybean future declined on the day of the USDA report. Soybean future prices dropped sharply. USDA crop report showed that tight supplies of corn and forecasts of high supplies of wheat and soybean. However, I earned money from 6 wheat long positions because wheat future increased before the report and I went the market at the cheaper price. Big gains were also achieved from higher corn futures. Huge decline in soybean futures offset gains from corn and wheat, so my equity isn’t high. As I forecast bullish soybean market the following week, I still have soybean to offset next week.

Week7: Cool Sources

Drovers Cattle Network


As livestock feeders are really sensitive to grains price, this America’s Beef business source website provides a lot of information about the future market of grains.  The website shows commodity future price quotes and charts and price spread charts. Updated global news helps readers to understand what is happening right now in the world grain market.  Weather forecasts are provided farmers and readers to convey weather information, the most important factor affecting grains future prices, in an easy-to-consume format. The website provides not only general weather forecast but also includes information about interactive radar, precipitation and temperature. Drought Assessment, soil temperature, hazard and water and flooding maps on the website are really interesting. I believe that this website is useful to us to figure out what is going on farming part and gather information to make right future positions.


(Tryied to post the map, but didn’t work)

Weather report: Cool and breezy in the Corn Belt

11/02/2012 2:00 AM
In the West, mild, dry weather prevails, except for a few showers in the northern Rockies and Pacific Northwest. On the Plains, dry weather accompanies record-setting warmth across the southern half of the region, where today’s high temperatures will again approach 90°F. In the Corn Belt, cool, breezy conditions across much of the region contrast with mild weather south and west of the Missouri River.In the South, warmer air is expanding eastward through the Gulf Coast States.
Read more

Week7: The Road Ahead

Wheat  Increase
Corn  Decrease
Soybean  Decrease
  • But, these grains futures will be predicted to   increase significantly on Friday, November 09, due to USDA update crop   estimations


Worries on lower wheat supplies from other exporting countries, Russia, Argentine, Australia and Ukraine will still increase the US wheat futures this week. However, this increase will not be significant as export demands of US wheat have not been boosted yet. According to USDA’s report, net export sales of 362,900 tones on Oct.25 were near the low end of trades’ expectations for sales in a range of 300,000 to 600,000 tons. Recent appreciation of US dollar also puts pressure on export demands of US wheat. This appreciation affects corn and soybean export demand as well. Corn futures will decline as large speculators cut their bullish expectation on corn futures. The Commodity Futures Trading Commission’s weekly commitments of traders reported that non-commercial traders including speculators reduced their long position in corn and soybean. Reduction of 46,901 long contracts of wheat was the biggest since the long contracts were cut by 47,412 in November, 2011. Reduction of long contracts means that more contracts are available in the market. Thus, corn and soybean futures will decline this week. However, I predict that USDA crops estimation on Friday, November 9, will report that low amounts of grain are available in the market due to drought and recent hurricane.  I expect dramatic increases in three crops futures on that day.  I will take long position of wheat and short position of corn and soybean this week, but I will offset all short positions on Thursday and take long position for Friday’s rally in all grains market.  (First of all, I will offset remaining short position of wheat





Week7: What I did Right

Date   In Date Out Initial   Position Offset   Position Price   In Price   Out Gain
Oct.29 Nov.02 Long(C2Z) Short $737.50 $744.50 $349
Oct.29 Nov.02 Long(C3H) Short $740 $742.50 $124
*Oct.23 Short(W2Z) Hold $865
*Oct.23 Short(W3H) Hold $874.5


I took two long corn positions and gained some money this week. I predicted that both corn and wheat future prices would go up this week, especially in wheat futures due to a higher demand.  Weak global wheat supplies from other countries were foreseen.  Drought conditions in Russia lowered the estimation of this year’s harvest to 80-85 million tons of wheat which is relevantly small to 94 million taken in last year. Argentine’s wheat production would also fall sharply by 28 percent this season due to export quota. Furthermore, Ukraine’s export ban on wheat was announced that it will come into effects from November 15.  Ukraine cut exports to protect domestic market which has been suffering from poor harvest.  I expected that these weak export supplies would shift export demand of wheat to US market. I planned to take long positions of corn as well because an increase in wheat futures would pull corn futures high. However, wheat orders weren’t available on Tradesims for first two days. And it was not good timing to enter wheat market because wheat futures already increased significantly. That’s why I had only corn positions this week. Two wheat short positions had been still in the market from last week to wait for price declining.

Week6: The Cool Sources

1)      Farm Futures


This website is business and marketing tools for farmers. Global market trends, daily e-marketing letter and weather forecasts are provided farmers to convey information in an easy-to-consume format. Traders are also able to know what is going on farming part and gather information to make right future positions.

2)      The Wall Street Journal


In order to trade well, traders have to keep updating their knowledge from global news. The Wall Street Journal provides global business news. We can learn what is happening right now in the word and anticipate how world grain market will be affected by the current economic trend. Then we can predict when and how the price of corn, wheat, and soybean will change. I found Ukraine’s Ministry of Agriculture announcement about an export ban on wheat from this website