In my first week of trading in a simulated commodity futures market, I choose to trade 2 contracts of soybean. I went short in the beginning of 2013 and long in the last trimester of the same year. I did so hoping that in the first months of the year the price of soybean will be high due to a decreasing supply and then, after the harvest of 2013 the supply will increase leading to a drop in the price of soybean.
I took in consideration information regarding next year increasing productivity of treated soybean (Syngenta Field Report), Canadian and global soybean production (AAFC reports), and China’s position on the world market (Reuters news).
Treating soybeans has become considerably more popular recently because the benefits are seen early in the season, as well as during harvest time. According to Syngenta research, last year, 24 percent of soybean seeds were treated with a fungicide seed treatment, but today, nearly 50 percent of seeds are treated with a combination of an insecticide and fungicide seed treatment. Choosing treated soybean seeds offers many benefits: protection against problematic diseases and pests, improvement of seed germination, seedling emergence, stand establishment and plant vigor. By using treated seeds over untreated seeds farmers will give to their soybeans an advantage in yield, quality and profit potential. Because of these benefits, it is expected that next year more farmers will choose to treat soybeans, which can lead to higher yield and increased profit at harvest.
Agriculture and Agri-Food Canada (AAFC) reports that warmer and dryer weather in Ontario is resulting in a forecasted 3.5% decrease in national soybean production. From the same source, global oilseed production for 2012/12 is projected at 427.1 million metric tonnes, down o.6 million metric tonnes, mainly due to lower soybean and cottonseed production.
China, the world’s largest buyer of oilseeds, imported 4.42 million tonnes of soybeans in August and reduced global supplies cut demand in the world’s top importer of the oilseed. Also, China will continue selling soybean reserves well into 2013 in a bid to contain food inflation and ease tight supplies caused by the historic drought across the U.S. grain belt.
http://www.agweb.com/blog/Syngenta_Field_Report_240/to_treat_or_not_to_treat/
http://agriforum.ca/2012/07/26/cereals-and-oilseeds-review-june-2012/
http://af.reuters.com/article/commoditiesNews/idAFL4E8KL04Z20120921
Good research on soybean!
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