Iris Han

Corn futures are trading lower midmorning. Corn futures are tumbling going into midday trade on spillover weakness in the soy complex and firm gains in the dollar index. Weekly export sales were once again disappointing this week. Current export sales totaled 167,900 tonnes, higher than the previous week’s sales but still on the low end of trade expectations. December corn futures are trading 7 ½ cents lower.

Wheat futures are trading lower midmorning. Despite solid losses in the corn and soybean markets and gains in the dollar index, wheat futures are posting marginal gains going into midday trade. Prices are currently being supported by technical buying. Dry conditions and poor condition ratings for the forthcoming winter wheat crop are also supporting prices. December wheat futures are CBOT are trading 4 ¼ cents higher; KCBT is trading 5 ¾ cents higher; and MGE is trading 6 cents higher. 

Soybean futures are trading lower midmorning. Soybean futures prices are declining as favorable jobs data boosts the U.S. dollar index. The jobs data pushed the dollar index over .60% higher. Downside momentum should be limited by firm export sales. Weekly export sales totaled 741,200 tonnes, which was slightly higher than expectations. November soybean futures are trading 20 ¼ cents lower.

Holding 6 – short on S2X                  mark to market

        price in:       1532.00

        today’s price:  1527.00

        committed:      $4625.00

        gain/loss:      $250.00

Ending balance as of 11-02-2012,

        Position Value: $4875.00

        Cash Available: $35821.65

        Equity:         $40696.65

        Realized Gains: $445.00

This week I continue a short soybean contract. The soybean future market is difficult to predict. The soybean market fluctuates this week. The soybean price decreases consecutive days, a slight rebound fell sharply, with large volume and open interest synchronization. Chicago Board of Trade (CBOT) soybean future was down 2 percent on last Friday, rising for the end of three days.

Fortunately, I did not offset it early.

The 2012U.S.soybean production forecast is raised, as well as the U.S. dollar deppreciation. Informa Economics estimated the 2012U.S.soybean production raised from 28.6 billion bushels to 29.25 billion bushels and the soybean yield forecast raised to 38.6 bushels from last month’s 37.8 bushels per acre. Commodity brokerage firm INTL FCStone estimatedU.S.soybean production was about 29.59 billion bushels this year, much higher than estimated 28.49 billion bushels. The company estimated that soybean yield was adjusted from the previous 38.2 bushels per acre to 39.1 bushels.

Estimations of the two companies are higher than the estimation report released in October by the U.S. Department of Agriculture. In November 9, the Ministry of Agriculture will release the latest forecast. The U.S. dollar depreciation weakens the competitiveness of American goods in the international market, which also gives the pressure on soybean prices. Ministry of Agriculture announced last week’s soybean export sales is at 760,600 tons, higher than the estimated 557,0 00 million tons.

Many indicators verified what I did is right.

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.