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.

Drovers Cattle Network

http://www.cattlenetwork.com/

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.

Features:

(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.
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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

http://online.wsj.com/article/DN-CO-20121102-009515.html

http://www.brecorder.com/agriculture-a-allied/183/1254411

http://www.businessinsider.com/the-worlds-biggest-wheat-exporting-countries-2011-4?op=1

http://rbth.ru/articles/2012/07/29/russia_to_cut_grain_exports_by_half_16793

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.

1)      Farm Futures

http://farmfutures.com/news.aspx

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

http://online.wsj.com/home-page

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

Low wheat supplies from other countries will cause the US wheat futures to go up this week. Russia, one of the main exporters of wheat, has been suffering from drought conditions that have dropped estimates of this year’s harvest. Russia’s Ministry of Agriculture estimated that 80-85 million tons of grain will be harvested which is relevantly small compared to 94 million taken in last year. Argentine wheat production also will fall sharply this season because farmers planted less due to export quota.  2012/13 wheat production, which will be harvested next month, will be 10.12million tonnes, dropped by 28percent from 14million tonnes produced last year. Furthermore, Ukraine’s Ministry of Agriculture announced that an export ban on wheat will come into effects from November 15.  Ukraine concerns that stocks are becoming more scarce on the domestic market due to poor harvest. Therefore, I expect that more demands of wheat will be shifted to the US market and then US wheat futures will rise. Wheat futures will pull corn futures high, but corn prices will change depending on up-date information of USDA on the supply and demand of wheat and corn. Thus, I will take long position of wheat and corn this week and I will offset both short wheat positions on the first day before the rally in wheat futures come.

http://www.brecorder.com/markets/commodities/america/85668-new-argentine-corn-wheat-rules-help-farmer-sales-.html

http://www.businessinsider.com/the-worlds-biggest-wheat-exporting-countries-2011-4?op=1

http://rbth.ru/articles/2012/07/29/russia_to_cut_grain_exports_by_half_16793

http://online.wsj.com/article/DN-CO-20121024-015116.html

I predicted that both corn and wheat future prices would go down this week and I was right. As both corn and wheat future prices had increased for the last 2 weeks, I thought that this week the price would decline. It is the basic trend in future prices that a decrease in future prices is followed after the price rises and vise versa. The weak export demand was also one of the reasons why I took 4 short positions of corn and wheat. Export demands of corn from China and Japan, large importers, have fallen. According to U.S. Department of Agriculture, net export sales of corn were 142,300 metric tons which was way below the level that the analysts had expected.  Ethanol productions have fallen off and the demand from livestock farmers have been weak. These tepid corn demands lowered corn futures and wheat futures also decreased by pressure from low corn futures price. Both grain prices move together because they are fed by animals. I did offset two corn short positions but not wheat because wheat price didn’t decrease significantly from the price I went market in.

1)      Forexpros

http://www.forexpros.com/

With 63241 members and networks with 17 countries, Forexpros is a one of leading and credible global financial portal that constantly launches innovative features and optimal one-stop source for reader. As Forexpros is financial market world wide website, it includes information relating to the financial markets such as real-time quotes, financial news, and technical analysis. It also provides in-depth information on Currencies, Indices & Stocks, Futures and Options and commodities. Furthermore, Forexpros shows weekly outlook, 135961 professional analysis and opinions on grain futures, so I believe that the site is helpful to predict what will happen to the grain futures.

2)      Barchart

http://www.barchart.com/

This website is another provider of price quotes, charts and technical analysis for commodities, futures and options. It includes up-to-date market news, futures&commodities news and daily chart of the day report. Futures Market Overview section includes Futures Market Snapshot, quotes of commodity futures Markets, futures heat map and full list of major commodities to provide readers with easy-to-understand information.

Barchart Futures Market Heat Map

Some bound effects of huge decline in the prices of corn, wheat and soybean are expected this following week. Nevertheless, I predict that these prices will start to rebound slowly because of low exporting sales. Then there will be negative changes in price early next week but not as much as last Friday. Argentina, the world’s No.6 wheat exporter and No.2 corn supplier after the United States, modified corn and wheat export policy to increase purchases of both grains for overseas. Domestic farmers are encouraged to plant more in the future. Under this new rule, exchange date showed  that 3.8million tonnes of wheat and 6 million tonnes of corn would be purchased in2012/13, way up from 1.2million tonnes of wheat and 2.1million tonnes of corn at this point in last year. However, this season’s single quota was announced after the farmers already started planting wheat. Therefore, the exchange expects Argentine wheat production to fall sharply this season. 2012/13 wheat production will be 10.12million tonnes, dropped by 28percent from 14million tonnes produced last year. Ricardo Marra, resident of Buenos Aires Grains Exchange, said that growers would have planted more wheat if the wheat export quota was announced two months earlier, with the high prices. Fortunately, the announcement of the quota for corn came in time to encourage farmers to plant more. The area seeded with corn is still 12% less than last year, but 8% more than the original plan before corn export quota was announced. With the quota, a month later 15 million of 2012/13 corn would be available for exports . Therefore, I expect that wheat future price will rise continuously and corn future price will drop after increase due to the bound effect the following week. I would like to get short position in corn and long position in wheat.

http://www.brecorder.com/markets/commodities/america/85668-new-argentine-corn-wheat-rules-help-farmer-sales-.html

http://www.brecorder.com/markets/commodities/america/85660-us-grain-exports-corn-wheat-sales-slump-on-high-prices-.html

This week was really dynamic. The prices of all grains fluctuated so much more than last week. Both corn and wheat price had been quite flat for the first few days and then increased gradually and spiked high as soon as after the USDA released the report on Thursday. USDA reported that corn and wheat production is lower than expected. Both grains price went up tightly together, but dropped so sharply on Friday because of a decrease in export sales. Soybean price also had decreased in early days of the week and then increased dramatically on Thursday and went down tremendously on Friday. My prediction was half right and wrong. I expected a decrease in corn and wheat price and an increase in soybean price. Based on the research, China, main corn importer from US, would import less because of huge corn production along with beginning stocks.  Furthermore, it was predicted that rain forecast for October in US plain  would boost prospects for seeding and harvesting red winter wheat. However, I foresaw that high palm oil price and low canola production shifted oilseeds’ demand to soybean and its price would go up. Unfortunately, I went out soybean market so early because its price was dropped so sharply just after I got 1 short soybean contract. I expected that corn price will decline little bit on the first day of the following week, so I hold that position. Although I did offset 2minutes before the market closed, my short position in wheat is pending. Based on the last price on closing day, my possible gain is $587.50 ($881-$869.25=$11.75/bushel).

(*The order was from last week, which was offset on Saturday, Oct.06 the day after last week’s closing day)