http://www.china.org.cn/

This website shows local and world news that are related to China. As china is one of large grain consumers, it is benefiticial that we can get information what happen to China.

http://www.foxnews.com/

This website is mainly dealt with news related to US. Also it is helpful to know world news. And we can also news video from the website, and it is updated very frequently, so we could read recent news.

The International Energy Agency predicted oil demand will grow at a slower pace. It is because the world economic growth rate is expected to slow, and the world oil demand as well. Meanwhile, global oil supply is increasing; however, there is uncertainty of Hurricane Sandy effect and Euro crisis. Thus oil price tends to fall or constants for a while.

Corn

I expect corn price will increase. The Environmental Protection Agency (EPA) says that it will keep in purchasing greater than a third of the nation’s corn to be converted into ethanol and blended into gasoline, so the demand for using ethanol will affect the price will go up. Also corn demand will remain high due to the animal feedstuff in China. The country needs 180 million tons of feedstuff this year which is 65 percent is made of corn

Wheat

I expect wheat price will go up. Russia, one of the world’s largest wheat exporters confront a supply deficit. The government plan to reduce the supply shock for domestic consumers, so it is trying to sell 1.25 million tonnes of wheat this year from its 5-million-tonne. But still wheat market is competitive. I think wheat price increase.

http://www.foxnews.com/world/2012/11/13/oil-falls-as-iea-predicts-demand-will-grow-at-slower-pace-next-year-due-to/

http://www.capradio.org/news/npr/story?storyid=165287910

http://www.china.org.cn/business/2012-11/18/content_27149412.htm

http://www.reuters.com/article/2012/11/14/grain-russia-idUSL5E8M74W020121114

http://www.nass.usda.gov/Publications/Reports_By_Date/2012/September_2012.asp

I mention this website form last website. This week I experience how important USDA report is. Traders make a contract by the time when the report released.  The crop report is so important to make a decision. This report explains how much actual crop will be traded in the market.

http://www.menafn.com/menafn/1093577664/Corn-traders-likely-set-for-more-mixed-price-signals

This website provides world headline news and financial information in the first main page. This website seems to be professional. This is website has many news from Arab. So this website deals with many news regarding oil and energy. The countries related to Arab such as US, China, Iraq. This web site also has its own research banner. For agriculture sector we can read article more in depth. For example, Gavin Maguire, one of writers explains the commodity market using terms of basis and the transport costs which we learn form 501 class. It was interesting to read article when I see how the terms actually are applied into real world analysis.

I expect corn and wheat price will be recovered, but soybean price will take time for recovery

Corn – USDA Report :Corn Production Up Slightly from October Forecast. Global supplies were estimated to increase crops, mostly due to larger stocks from Mexico and EU-27, and increased some are of U.S. production. However the corn production in U.S is damaged over the summer by the severe drought. So compare to last year, the supplies is not enough to satisfy the world demand.  According to Jim Gerlach, president of A/C Trading Co, he expects the corn market will be competitive because USDA did cut expected export volume for corn, so I conclude that the price will increase because of not sufficient stock.

Soybean- USDA Report: Soybean Production Up 4 Percent. It is because that increased rainfall helped soybean production and supplies. The report also states export volume will be increasing due to increased supplies. So the soybean price will be low.

Wheat-USDA Report: USDA Report said that U.S. wheat stocks were increased by 50 million bushels to 704 million. So the price decreased. However Global wheat supplies were estimated 1.9 million tons lower due mainly to decreased production in Australia. And Ukraine’s export ban also affects decreasing the supplies of wheat. so I think wheat price will go up because trade policy and weather affect the trade volume.

http://usda01.library.cornell.edu/usda/current/CropProd/CropProd-11-09-2012.pdf

http://www.forexpros.com/analysis/wasde:-corn-and-soybean-yields-increase-143016

http://online.wsj.com/article/DN-CO-20121109-010515.html

This week I lose half of my equity. It was like the movie Trading Place….

I thought soybean will increase. I had 6 soybeans in my contract. I thought it would increase. One of major producer in Argentina was expected heavy storm, so planning process has been slow to be 4% from 9%. I thought the supply could not satisfy the demand. And as substitute effect, corn price would increase too. So I had two long positions on corn. However, after USDA report released, both soybean and corn price decreasing a lot. Especially soybean, even though the trading market was closed, the soybean price kept decreasing by 40. Luckily for corn I offset before that. I could make some money.  I hope that soybean price is recovered. If not, I think I will bring it to end of class.

I had one long contract on wheat. I expect wheat price increase. Overall I thought US presidential elections will make the commodity market more attractive. Also when I gather information from reading article, it says that world wheat market supply is not enough to support world demand. It is because an export ban policy from Ukraine implemented soon on 15th this month. The area of U.S. Plains, major US agriculture, has not been recovered from severe drought condition.  Australia for New South Wales is expected rain in time of harvest which affects world supply decrease. As my prediction, wheat price was increasing, but after report released, the price was decreasing little bit. I kept this week.

http://www.bernama.com/bernama/v6/general.php

This website helps us to understand the price change by providing literature explanation. For example, this website illustrates what happen to Argentina after strong storm came. It says that due to storm, the planting day has been delayed to 4% from 9% last year of 19.7 million hectares. As a reader, it is easy to understand the storm effects on commodity by giving the reasons with specific numbers. The website title is Bernama refer to Malaysian National News Agency. It is built by Act of parliament in 1967, and it is monitored by Board of Governors. Bernama has office in Washington, London, Manila, New Delhi, Dhaka, Melbourne and Vancouver. Its goal is to provide reliable and latest news among local & international media including government agencies, corporations, and university students. It is interesting that many Malaysian newspapers, electronic media and even Federal Governors are BERNAMA subscribers. I think this website purpose is to educate people, and we could read commodity news and global hot issue.

http://www.ibtimes.com

The International Business Times show three commodity markets at once. On the market/finance section we can read commodity news. The have commodities market separately. So it is easy to read news. This website gives natural resource price change, and corn with ethanol price change.  The website is updated every day with different topics.

US currency is appreciated against Euro. This stronger dollar cause the U.S. crops less attractive for buyer. A long with stronger currency, the crude oil price is expected to low. Analysis said that the demand has not recovered yet and storage for oil is not low. In general I think the price of commodity market tend to increase due to the following U.S. presidential elections. As well, the commodity price will respond to the USDA’s weekly crop progress report on Monday and Thursday’s weekly exports data and Friday’s updated Supply and Demand Report. For better future commodity price, I think following USDA Crop Report is important to check.

For wheat market, “World wheat crop is getting smaller by the day” according to Analyst Melbourne, he mentioned.  I expect wheat price will increase. It is similar with last week. It is due to Ukraine’s export ban policy is implemented soon on 15 NOV. The severe drought weather condition in U.S. Plains affect the supply of wheat, and Australia for New South Wales is expected rain in time of harvest which affects world supply decrease, and greater demand for wheat.

As well soybean market, I expect that the price will increase. Analytics firm Informa Economics raised its estimate of the U.S. 2012 soybean crop to 2.925 billion bushels from 2.86 billion previously. However, there is also forecast of heavy storm in Argentina. It causes the actual planning process to be 4% from 9% last year of 19.7 million hectares they plan to plant soybean. The higher yield will offset the delaying of planning corn in Argentina. So I will choose long for soybean and wheat market.

(1)    http://www.forexpros.com/news/commodities-news/grain-futures—weekly-outlook%3A-november-5—9-240264

(2)    http://www.nass.usda.gov/Publications/Reports_By_Date/2012/November_2012.asp

(3)    http://af.reuters.com/article/commoditiesNews/idAFL3E8M50IW20121105

(4)    http://www.bernama.com/bernama/v6/newsworld.php?id=706994

(5)    http://www.ibtimes.com/corn-soybeans-wheat-prices-858712

(6)    http://www.forexpros.com/news/forex-news/forex—eur-usd-weekly-outlook:-november-4—9-240269

Last week I expect the price of corn and soybean increase. First I look at the oil price.  Due to Hurricane Sandy moving toward northeaster US, it causes that Oil supply is not guaranteed for a while. Also US currency is depreciated against Euro and Yuan. Such increasing oil price and increasing demand $US lead to increasing commodity price in general.

More specifically, regarding wheat market, I chose a long position.  It was because the amount of actually supplied did not meet the expected harvest amount in Russia. As well, main region for agriculture in US has not recovered from severe drought weather. Also from Nov 15^th Ukraine implement wheat export ban. All these led to wheat price would go up I expect. I offset what I bought last week for wheat and and corn commodity on Oct 30th. I think I should have not offset it. I was afraid of whether the price kept increasing with my short position. And I made big loss of -4595.5, and the wheat price kept dropping to 868.5 until last Thursday, so my potential loss was -212.5.  , Luckily on Friday the wheat price increased to 878.50, so I gain 286.50. So I can say my prediction was right on the last day of trading.

For soybean market, I was long position too. I looked news from major soybean producer in Argentina and Brazil. They are expected good harvest, but I expect it takes time to get actual commodity into market. I made conclusion that demand would be greater than supply. My prediction was right until Thursday. The price of Soybean S2X increased to 1558.5 from 1533, and the price of soybean S3F increased to 1560 from 1535. So my potential gain was 1275 and 1250. However, the price decreased on the last day of trading. This causes loss from soybean. I think next time I offset it earlier.