This week I chose a long buy November soybean contract (S2X). Till now I have already earned 137 dollars. There were several reasons for me to make such choice.

Firstly, on September 12, 2012, the United States Department of Agriculture (USDA) forecasted that the soybeans harvest would be less than expected. As we all known, there was a great drought in the North America few months ago. It severely impacted the output of the soybean. (http://www.ibtimes.com/global-soybean-output-drops-futures-rise-usda-435710) Since October is the harvest season of soybean, I boldly predicted that the price of the November soybean in this year will rise.

Secondly, the imbalance of the world soybean’s demand and supply will aggravate its price’s rising. We have already witnessed the decrease of US soybean’s output, and this time it’s impossible for America to make up a loss by  transferring the export demand to the South American market (because the output of the soybean in South America this year is 16.5million tons fewer than in last year). However, the demand of the soybean is still high around the world. As for China, it has imported 34.92milllion tons of soybean from January to July this year, which refers to a year-on-year increase of 21%. So the late changes in demand will limit the decrease of the soybean’s price.

All in all,  these analysis leaded to the gain in my account.

References:

http://www.ibtimes.com/global-soybean-output-drops-futures-rise-usda-435710

http://www.wzxdly.com/en/NewsView.asp?ID=76