Month: October 2012

I wanted to offset the short contract of soybean, but it increases in the continuing three days .The demand of continuing increase shows the strong increase trend of cash market instead of temporary information shock. I predict this continue trend may not disappear recently.I will not offset it until the trend becon advantageous.

This week I went a short contract of soybean. The equability is $38983.90. I suffer a loss of  $-1462.50.I am more familiar with the trend of corn, and the violability of corn is not as much as soybean. So I am continuing  short corn contract.

According to Chicago on Oct. 26, the Chicago Board of Trade corn futures on Friday closed down due to reduced demand for exports, and there are indications of slowdown trend in the livestock and poultry industry needs.December corn futures contract settled down 4-1/4 cents to $ 7.37-3 / 4 per bushel.
The agrometeorological experts said on Friday that, from this weekend and continue into next week, early dry weather will boost the prospects for the U.S. corn and soybean crops harvest.MDA EarthSat Weather weather experts said , “people will breathe a sigh of relief, because the weather dries out and contribute to the harvest of corn and soybean crops.”The traders said most of the U.S. corn spot basis bids steady.December contract cut into  key resistance level and the 50-day moving average of $ 7.69-1 / 4.Ninth day Relative Strength Index (RSI) is 40.

In recent months, the Chicago Board of Trade (CBOT) soybean futures fell on the second day in a row to lock in profits and the hedgers thought soybean prices hit a highest price in three and a half weeks. Soybean contract of November decreased, far-month contract rose as traders settled arbitrage trading. The November futures were expired on 27^th October, the strike price was to attract prices close to the level of outstanding contracts at $ 15.60.

Soybean closed up, rose in the seventh day of past 8 days, because U.S. soybean cash market price increased. U.S. domestic soybean processors were forced to raise the bid to buy soybean otherwise the soybean will be exported.

Traders present the conflicting views of the South American soybean crop area weather. South American soybean is predicted of high yield in 2013. Local weather forecast agency Somar said this weekend rainfall would already come over southern Brazil cereal area, making things worse.

Soybean contract of SX2 increases by 17-1/4 cents at $ 15.70-1 / 2 per bushel. The settlement price is higher than the 100-day moving average price, which is the first time in recent two weeks. U.S. Department of Agriculture confirmed that the export is 105,000 tons of. soybeans. Analysts expect the U.S. Department of Agriculture of export sales of U.S. soybeans last week is about 65-85 million tones.

This week I went a short contract of soybean. The equability is $38983.90. I suffer a loss of  $-1462.50.I am familiar with the trend of corn, and the violability of corn is not as much as soybean. So I always tried corn contract. This week I want to try soybean. Because they are substitution of consumption and supply, and the causes of price fluctuation are often the same, so, it is easy to predict the trend of soybean.

But this week, the corn is always downwards because of the decreasing demand of exports. But the export demand of soybean is increasing. I ignore the analysis of different export demand quantities, so I supposed they are in the totally same trend.

I wanted to offset the short contract of soybean, but it increases in the continuing three days .The demand of continuing increase shows the strong increase trend of cash market instead of temporary information shock. I predict this continue trend may not disappear recently.

I encounter two days of margin call. I lost as much as nearly $2000 on Thursday. But the loss return better on Friday. Soybean contract of SX2 increases by 17-1/4 cents at $ 15.70-1 / 2 per bushel. The settlement price is higher than the 100-day moving average price, which is the first time in recent two weeks. U.S. Department of Agriculture confirmed that the export is 105,000 tons of. soybeans. Analysts expect the U.S. Department of Agriculture of export sales ofU.S.soybeans last week is about 65-85 million tones.

I will sell contract of soybean.I will do nothing about contract of corn because the different trends of the report prediction and the future price. 

It is difficult to undertake due to lack of speculation theme, and speculators continued reduction of the CBOT soybean long positions. It was triggered by the U.S. soybean harvest decreasing the price gradually become a downtrend  in market.   

USDA  report in October estimated world soybean stockswas around 57.56 million tons, 54.79 million tons ,higher than the previous year. World soybean supply and demand relationship in 2012 will turn into a slightly loose.So the increase trend will end up right away. U.S. soybean export sales are big, which become a major factor in the market supressing the short-term rebound. However, the U.S. soybean pre-sale is strong in the early stage , the subsequent export slow down.We may find it lack factors effectively stimulating the market prices.

Currently, the South American soybean sowing weather condition is good except for the Brazilian north-central partial drought. With the disapaerence of La Nina phenomenon, high yield is just around the corner. The remaining influence of the financial crisis on the global economymake the market lack incentive of rise. The demand for soybean oil remains stable, but difficult to grow substantially. And the United States in 2013 soybean acreage expand,and it is predicted  world soybean stocks will rebound.

So soybean prices in the long-term downward trend has been consolidated.

On Oct. 11, the Chicago Board of Trade (CBOT) corn futures on Thursday increase sharply due to the influence of the USDA report in October.

The U.S. Department of Agriculture forecast U.S. and global corn stocks in 2013 will be less than expected, imbalance of demand and supply are expected to result in lowest amount of stock during 17 years before. It is lower than analysts’ forecast of 648 million bushels. U.S. Department of Agriculture also announced that the Global 2012/13 corn ending stocks estimated to 1.1727 million tons, the peak of recent six years, which is lower than the September forecast of 1.2395 million tons and market analysts’ prediction of 1.21322 million tons. Because U.S. crop yeild decreased by drought, and decreased EU corn production by 2.6% in the report. USDA expected U.S. corn crop yield was 10.706 billion bushels,higher than 1%  compared to the analyst prediction of 10.601 billion bushels.An agricultural meteorologist said on Thursday, the weekend’s rainfall is expected to cause the postponement of the U.S. corn and soybean harvest, but next week the weather will be so good that corn and soybeans recovery invasive fast record harvest.It is proved that the harvest of corn increase the price of future market.

December corn futures closed price rose by 36 1/2 cents(5.0%) at $ 7.73 1/4 per bushel, the highest settlement price for the past month in Oct 10th.Many short heghers lost much on Oct 10th.

These two weeks I sold corn future contract. And I offset it on Oct 17^th. Generally, I gain $445, accounting 50% for the whole investment. I thought I had invested smartly this week.

What should be mentioned is that I suffered margin call on Oct 11th, when the USDA report was released. I was in panic when I received the email of margin call. But I calmed down myself, finding out the reason result in the sharp decrease. Chicago Board of Trade (CBOT) corn futures Thursday ended sharply higher, due to the USDA supply and demand report on October. USDA forecastU.S.corn ending stocks at 619 million bushels, the lowest point during 17 years, which is less than analysts’ forecast of 648 million bushels and less than the September forecast of 733 million bushels.I continued holding the contract for six days. Because it was predicted that he soybean sharp decrease may influence the soybean market .Then I offset it and had a big gain.

Oct 11^th

Oct 17^th

The former blog I have written mentioned my prediction about the decrease of corn and my uncertainty about soybean market. Many traders believe that the U.S. Department of Agriculture report announced next week, might raise the soybean yields, the increase rate is expected about 2 bushels per acre to 4 bushels, to suppress soybean prices down. And it is not sure that the USDA report’s influence to soybean price is negative or positive. I choose to do nothing with soybean. It is proved that I am right. It is necessary to analysis the whole market and reports and refer to experts’ comments. After collecting information and analysis them, you will be an expert, and gain a lot.

I think the price of corn continue to be downwards. I will sell a corn contract next week.

Firstly, many traders believe that the U.S. Department of Agriculture report announced next week, might raise the soybean yields, the increase rate is expected about 2 bushels per acre to 4 bushels, to suppress soybean prices down.

Secondly, an agricultural meteorologist said, good weather is expected to be in the next 1-10 days, the farmers of corn and soybean harvest will continue to maintain a rapid pace, while in this week , with a light rain, harvest progress slowed slightly.

Additionally, weak export demand signals, made many investors chose to take profits before the crop supply and demand report of Ministry of Agriculture annunciation next week in this Friday, the day’s price was suppressed temporarily. The whole tendency does not change.

The factors contributed to this week corn prices’ fell was temporary. The main factor to influence the price is information production. I believe the next week USDA report will have an big influence on corn downwards price.

In addition, the information of soybean is not as much as corn. And it is not sure that the USDA report’s influence to soybean price is negative or positive. I choose to do nothing with soybean.

Cool Source of Materials

Chicago Board of Trade (CBOT) corn futures fell on Friday due to the seasonal harvest pressure and non-governmental organizations’ higher expectations ofU.S.corn production this year than the government estimated.

Economics analyst, said in Friday that the United States Department of Agriculture (USDA) will raise its corn production estimate to 11.194 billion bushels and yield per acre estimate to 127 bushels. USDA corn production was estimated at 10.727 billion bushels before. In next Thursday, October 11, U.S. Department of Agriculture will release its new October supply and demand report.

An agricultural meteorologist said, is expected to be in the next 1-10 days, the farmers of corn and soybean harvest will continue to maintain a rapid pace, while in this week ,with a light rain, harvest progress slowed slightly.

The U.S. Grains Council said China this year, high corn production meet domestic demand, the yield about 500-600 million tons more than that of last year .Due to market less reliance on the U.S. crop export , the Chicago agricultural futures market corn and wheat futures contract price fell in the 5th, while soybean prices were flat with the previous trading day.

A private sector forecasted, this year’sU.S.corn production is expected to be close to 112 billion bushels, higher than the 10.727 billion bushels projected in September by the U.S. Department of Agriculture. In addition, some traders expected the corn in the next week harvest progress steadily. Weak export demand signals, made many investors chose to take profits before the crop supply and demand report of Ministry of Agriculture annunciation next week. Corn prices is suppressed.

However, many traders believe that the U.S. Department of Agriculture report announced next week, might raise the soybean yields, the increase rate is expected about 2 bushels per acre to 4 bushels, to suppress soybean prices down.

This week I sell two contracts of corn and soybean. I haven’t offset both contracts until now. Generally, I did not lose too much. But this week the soybean future market is not easy to predict. It fluctuates a lot this week, while the corn increases steadily.

Corn

Oct 6

Oct 4

Soybean   

Oct 6

 Oct 4   

There is something right to help me not lose too much.

I continue selling two different products to spread risk. Obviously, the lose of corn can be compensated partly by the gain of soybean. The corn market is predicted to decrease due to rapid harvest, while soybean is expected to decrease due to revising of soybean production by Ministry of Agriculture last week. Before I invested in the future market, I analysis the graphs of price fluctuation and reports, they have had different tendency. As we all know, information contributes to the price change. It is not easy to change the fluctuation unless the incentive happens.

However, there is something wrong resulting in slow increase of value and even a little lose.

Firstly, As we all know, information contributes to the price change. It is not easy to change the fluctuation unless the incentive happens. I missed the good opportunity in Oct 4th to offset the contract, when the price increases at the peak. Because the increase is not too much cam pared to the last two weeks, I thought it would continue felling. I ignored to renew my information of future market every day , consequently, I have the wrong understanding of whole market tendency.

Chicago Board of Trade (CBOT) corn futures fell on Friday due to the seasonal harvest pressure and some non-governmental organizations’ higher expectation aboutU.S.corn production this year than the government estimated. This year’sU.S.corn production is expected to be close to 112 billion bushels, higher than the 10.727 billion bushels projected in September by the U.S. Department of Agriculture, increasing the corn market pressure.  

In addition, some traders expected the corn in the next week harvest would have a stable progress. Weak export demand signals made many investors chose to take profits before the crop supply and demand report annunciation of the Ministry of Agriculture next week, corn prices also was suppressed.