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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.

September 27, the Chicago Board of Trade soybean futures rises closed Friday, driven by the daily limit of corn futures and wheat futures rose 5%, assisting market to get rid of the U.S. Department of Agriculture the soybean inventory report negative impact on price rise.

U.S. Department of Agriculture announced that, as of September 1, theU.S.soybean stocks at 169 million bushels, is higher than the market forecast range of 1.1-1.52 billion. Ministry of Agriculture confirms last year’sU.S.soybean production was revised to 3.093 billion bushels, compared with 37.5 million its forecast.

The increases were limited by the large number of the October futures first delivery notice day delivery.

TheU.S.corn and soybean harvest next week should be rapid progress, a small amount of rainfall will only result in a short-term impact.Brazilincrease the plant area of soybean. Indicators key resistance for December corn futures contracts for the 50-day moving average at $ 7.90, the main support for the 100-day moving average at $ 6.86-1 / 2. Nine days Relative Strength Index (RSI) is 48. Indicators December corn futures contract settled up 40 cents to settle at $ 7.56-1 / 4 per bushel. Today CBOT corn futures volume was estimated at 371,870 hands.

The price of corn is still down. Corn futures news in September 28 CBOT Friday ,the price difference surged 40 cents, in the limit closure. The United States Department of Agriculture (USDA) announced, a quarterly inventory report showingU.S.corn stocks by September 1, much lower than the estimated. The market price reacts positively. A USDA corn stock is at 988 million bushels, below the analyst forecast of 1.113 billion bushels. Despite the progress of theU.S.corn harvest is positive, CME group report shows that yields are better than expected

In conclusion, the price of both products will be downwards .

What Went Right and Wrong

This week I sell two contracts of corn and soybean. I offset both contract in Friday. Now I have no future. Generally, I gain not too much. But this week the whole future market is not easy to predict. It fluctuate a lot this week.

There is something right to help me keep gaining.

Firstly, I sold two different products to spread risk. To put all money on one product is risky. 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.

 Secondly, recently, CBOT soybeans market showed a relatively weak state. After theUnited Statesdetermines to cut the harvest, the market has been the lack of fresh information guidelines. And it  is now in the soybean harvest season, the market worried about the influence ofU.S.harvest cut-down will not work as expected. Weather is good for planting of the crop-producing areas inSouth America. According to soybean weekly export in recent weeks, in theUnited States, the data of inspection and squeezing relatively low, show a slight weak signal. However, with rains in August and September, the corn yield is gradually stabilizing. Since this year’sU.S.corn planting earlier, the current harvest rate of 26%, while 8% in the same period last year and the 9% of five-year average.26% has hit a record level in nearly two years. Therefore, good market supply accelerated the decline in corn prices.

However, there is something wrong resulting in slow increase of value.

I missed the good opportunity in Sep 27 to offset the contract. When the price sharply increases abnormally with no obviously reason, it will return to back finally. The hedger should take this risk.

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Recently, CBOT soybeans market showed a relatively weak state. After theUnited Statesdetermines to cut the harvest, the market has been the lack of fresh information guidelines. And it  is now in the soybean harvest season, the market worried about the influence ofU.S.harvest cut-down will not work as expected. Weather is good for planting of the crop-producing areas inSouth America. According to soybean weekly export in recent weeks, in theUnited States, the data of inspection and squeezing relatively low, show a slight weak signal. However, with rains in August and September, the corn yield is gradually stabilizing. Since this year’sU.S.corn planting earlier, the current harvest rate of 26%, while 8% in the same period last year and the 9% of five-year average.26% has hit a record level in nearly two years. Therefore, good market supply accelerated the decline in corn prices.

In additionally, according to corn futures news in September 28 CBOT Friday ,the price difference surged 40 cents, in the limit closure. The United States Department of Agriculture (USDA) announced, a quarterly inventory report showingU.S.corn stocks by September 1, much lower than the estimated. The market price reacts positively. A USDA corn stock is at 988 million bushels, below the analyst forecast of 1.113 billion bushels. Despite the progress of theU.S.corn harvest is positive, CME group report shows that yields are better than expected, The price of corn is still up.

An agricultural meteorologist said on Friday, theU.S.corn and soybean harvest next week should be rapid progress, a small amount of rainfall will only result in a short-term impact. Indicators key resistance for December corn futures contracts for the 50-day moving average at $ 7.90, the main support for the 100-day moving average at $ 6.86-1 / 2. Nine days Relative Strength Index (RSI) is 48. Indicators December corn futures contract settled up 40 cents to settle at $ 7.56-1 / 4 per bushel. Today CBOT corn futures volume was estimated at 371,870 hands.

I often refer to CME GROUP before I make a order. The price and volume everyday are drawn in detail. The trend is easily to found refering to the graph.

http://www.cmegroup.com/trading/agricultural/grain-and-oilseed/corn.html.       

Additionaly,the comments of many experts are useful and reliable For beginners,the experience of veterans can inspire them how to make a brilliant order,when to trade and offset.I can combine the different opinions and choose the most persuasive opinion.

http://www.cmegroup.com/education/market-commentary/.

The most authoritive website is USDA report..The USDA report gives us a reference of  production and global trade quantity. Usually,the price is mainly influenced by the supply quantity.

http://ers.usda.gov/newsroom/us-drought-2012-farm-and-food-impacts.aspx

In agriculture,weather is an main factor. The weather is easily to be predicted due to the  technology.The future price is easily influenced by the production.

http://www.weather.com/outlook/weather-news/news/articles/weather-maps_2012-01-13

Obviously,the US dollar can affect the price of agriculture products.Recently,the value of  US dollar decreases. The other country currency capacity of buy rises. The price is downwards consequently.So,the value of US dollar must be taken into consideration when we analysis the trend of product price.

    The price of corn next week is expected to be downwards.

     Firstly, it lacks incentive to rise the corn price.  Growing wheat and corn price difference prompted farmers to increase the amount of alternative wheat for feeding livestock.  This is difficult to narrow the prce difference in a short period. The substitution reduces the consumption of maize, to suppress  the price of corn. I will continue to sell corn next week.

      Seconly,grain and soybean prices fell more than 4%, pressured by a seasonal increase in corn and soy supplies as farmers harvest crops in theMidwest.Prices also were weighed down by favorable weather outlooks inSouth America, where farmers are getting ready to plant soybeans and other crops in coming weeks. 

      Thirdly,the weaher will change and have an positive influence on price decrease.the weekly U.S. Drought Monitor update released Thursday showed that recent rainfall benefited parts of the Corn Belt, coming too late to help already damaged corn crops but still likely to plump up maturing soybeans in the fields.

     In conclusion,I will continue to sell corn contract.The price of corn next week is expected to be downwards.

Fortunately, my realized gains is $374. Cash available is $40374.51.I sell a contract of C3U corn in Sep,14th. The price of corn dropped down at the first two days, and the gains was 587 at the peak. I offset the contract in Wednesday.

         In my opinion,there are three reasons for the gains. I analysised the condition of recent corn trade before trading, notice the trend was downwards. Because September is corn’s harvest time.The supply quantity in the market was huger. Referring to the demand and supply curve graph, the supply curve was shift to the left , then the price came down. Secondly, during the harvest time, the stock-out happened easily . Especially, the stock was little before harvest time. Thirdly, the weather during this week was good without rains, had an oppsitive influence on harvest.

I currently have no stocks.

Generally, I find I can use the CME statistics moderately. Combining the comments of experts is helpful. I often refer to some experts’ comments and predictions. I got some useful information about how the price is influenced by production, how the production is influenced by weather. Professor taught us the stock-out theory this week, which is useful in analysis during harvest time.

Why the creation of the gateway pipeline fromAlbertatoKltimat BC will raise the price of crude oil forCanadarefineries?

From the radio(http://www.cbac.ca/asithappens/episode/20120/09/04/he-tuesday-edition-45/),the rasons are as following.

Firstly, once the pipeline is built,Canadaproducers can access to Asian premium. Asian premium, the term refers to the US$1-US$2 (HK$7.80-HK$15.60) per barrel premium Middle Eastern oil producers, particularlySaudi Arabia, automatically levy on sales to Asian customers.   ( http://www.energybulletin.net/node/3349).    Asian countries can get crude oil fromnorth Americain higher price. By accessing to the Asian premium, producer make new standard. So everyone must pay higher price for crude oil, including Canadian refineries.

Secondly, once the pipeline is built, the crude oil directly away from south American reduces, then low the activity and capacity of Canadian refineries by 5% in first or two years or worse in the future. As the price increases,China can offset it,so the crude oil can supply domestically less.

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