The USDA’s report on October 11, 2012 did not make a substantial difference in soybean prices.
In last week in my blog I mentioned that I was hoping the price volatility in market because of expectation of USDA’s report, so the speculators would use it to play with the market. Therefore, I kept my spread position in soybeans to avoid risk and I could do it.
On Thursday before release of the monthly crop report the soybean prices went up due to news that even though USDA was about to increase its estimate of crop production, the soybean inventories were down because of export of soybeans to China which was unusual for this time of year.
Oil World said, “US soybean exports to China were unusually large for this time of the year at roughly 2.5m tonnes in August and September but could not offset the shortfall in exports from Brazil and Argentina.” In the light of this situation, soybean prices went up, so I could make profit in long but I lost in short.
However, on Friday the market went in inverse direction after USDA’s report. Soybean production is forecasted at 2.86 billion bushels, that is a 9% rise over the September estimate, but down 8% from last year. Here are the soybean prices as of Friday October 12.
Soybeans November 2012 (CBOT)
[ Futures Prices ] [ Options ] [ Detailed Quote ] [ Technicals ]
|
Date |
Open |
High |
Low |
Last |
Change |
Percent |
|
10/14/12 |
1519-0 |
1520-0 |
1507-4 |
1508-0 |
-14-4 |
-0.95% |
Soybeans March 2013 (CBOT)
[ Futures Prices ] [ Options ] [ Detailed Quote ] [ Technicals ]
|
Date |
Open |
High |
Low |
Last |
Change |
Percent |
|
10/14/12 |
1489-2 |
1489-2 |
1477-0 |
1477-0 |
-15-0 |
-1.01% |
Briefly, my equity balance at the end of week was “$35486.77” not so much different from last week.
I think I will offset the contracts because of the price declines. However, I have to see because it is said by experts that even though USDA raised its forecast of soybean production, it also increased the volume of export. And, South America’s planting of soybeans might be delayed due to expected unpleasant weather in that part of world. Therefore, I have to keep eye on these events. Furthermore, I expect that the campaign about to label products made with GMOs in California can somehow affect the market if it is passed in November.
References:
http://farmfutures.com/story.aspx/morning-market-review-bryce-knorr-22-30780
http://www.agrimoney.com/futures.php?page=chart&sym=ZSX12
http://farmfutures.com/story.aspx/export-sales-disappoint-64075