This week, my equity is $40429.86. I went long on wheat last week and I’m glad to find out that the price of wheat was rising in most of time last week. Although the price went down on Friday, I do believe it will go up in the future. Now, let’s find out why the wheat price went down last week.

Why the price went down on Friday? Well, the reason is that USDA Raises Corn, Soybean Production Estimates. Corn production is forecast at 10.7 billion bushels, up slightly from the October forecast but down 13 percent from 2011. This represents the lowest production in the United States since 2006. Based on conditions as of November 1, yields are expected to average 122.3 bushels per acre, up 0.3 bushel from the October forecast but 24.9 bushels below the 2011 average. If realized, this will be the lowest average yield since 1995. Area harvested for grain is forecast at 87.7 million acres, unchanged from the October forecast and up 4 percent from 2011.This estimate will decrease the corn price. As we know, wheat and Corn can substitute to each other. If the price of corn went down, the price of wheat will go down too.

As we can see, USDA report can affect the future price easily. So, it is important to pay more attention on USDA report.

1. http://www.brecorder.com/markets/commodities/america/89177-soybeans-drop-pull-corn-lower-while-wheat-steadies-.html

How will the price of wheat, corn and soy beans can affect each other? How will the bad weather in South America affect the whole world price? This article shows us all the information we need and we can learn how to analyze ourselves.

2. http://www.brecorder.com/markets/commodities/america/88774-speculators-cut-cbot-corn-longs-by-21-percent-cftc-.html

Large speculators made the biggest cut to their bullish bet on corn futures in nearly a year as anemic global demand for US supplies weighed on prices, regulatory data issued on Friday showed.

3. http://www.agweb.com/article/drought_makes_wheat_attractive_for_feed/

This article talks about Wheat Feeding Decision. The decision to use any grain, including wheat, in feeding livestock is a complex management decision. Energy and nutritional needs in a balanced feed ration are specific to both the animal species and the type of animal within a species. Moreover, changing the mix of wheat in a ration during a feeding cycle can materially reduce feeding efficiency. Hence, livestock feeders want to be relatively certain that not only is wheat a cheaper source of feed now but will remain so throughout the feeding cycle. In other words, the decision to feed wheat is more of a longer-term strategic decision than a short-term tactical decision. This may partially explain why the share of wheat that is fed is positively and statistically significantly correlated in adjoining years: +0.42. Thus, high wheat feeding in one year is likely to be followed by high wheat feeding next year.

Next week, I’m still going to focus on wheat. As we know, as the harvest of wheat is coming to an end, the trend of wheat price is increasing. However, there are still some news can affect the price of wheat in short run. I believe the price will go up in long run, but may be affected by other news in short run.

First of all, price of corn fell last week, pressured by the drop in soybeans, while wheat was up slightly, but well below its daily highs due to a round of profit taking. Concerns about tightening global supplies due to adverse weather conditions in key growing areas supported wheat. Wheat fell 4.2 percent in October, its biggest monthly decline since November 2011, which has sparked some bargain buying on dips in recent days. Based on the information above, I believe the price of wheat will go up soon.

Another news about wheat is that In its October World Agricultural Supply and Demand Estimates, USDA increased the estimated feeding of wheat during the current 2012/13 wheat crop year by 95 million bushels to 315 million bushels. USDA currently projects that the feeding of wheat will account for 12.7% of total projected use of U.S. wheat during the 2012 wheat crop year. This exceeds the average share of 9.1% and is the highest share since the 2000 wheat crop year. The increasing demand of wheat will certainly rise the price of wheat. It is obvious that the price of wheat will go up in long run.

The strategy of this week is that go long on wheat and offset weeks later. I hope I can earn a lot this week!

This week, my equity is $41557.20. I earned 3197 dollars last week. I offset my long contract because I want to “put” the money into my pocket. So, what went right? Well, I believe there are three major reasons that kept the price up last week.

First of all, Hurricane Sandy attacked the east coast of America last week. As we know, Sandy is a very severe disaster that caused severe floods in many cities. The Hurricane affected the transportation of wheat and it reduced the harvest of crop. There were more wheat needed and the transport of wheat is inconvenient.

Secondly, even with recent weather disruptions, U.S. farmers still made harvest progress this week. According to this week’s USDA Crop Progress and Condition Ratings, of the 18 key corn-growing states, only Michigan, Ohio and Pennsylvania have not reach 70% complete. South Dakota has reached the finish line in corn harvest, an impressive feat since normally they only have 47% harvested by this point in the season. As harvest is coming to an end , the price of crop will increase as time goes by.

Thirdly, a Libyan state grain buying agency tendered to buy 30,000 tonnes of milling wheat, 15,000 tonnes of corn and 10,000 tonnes of barley for delivery in November, European traders said. The bidding deadline is Nov. 6. The demand is rising so the price will rise too. Russia’s 2012 wheat crop will be just over 37 million tonnes, lagging official estimates by 6 percent, analysts said. The supply is decreasing so it will also increase the price.

1.http://www.agweb.com/article/blockbuster_bean_yields_headline_harvest_reports/

How can the weather affect the amount of soybeans and crop? This article talks about the farmers’ opinions. As they are first hand information, it is important to know what’s going on. As U.S. farmers wrap up their 2012 harvest seasons, several are reporting outstanding soybean returns via the AgWeb Crop Comments page. Meanwhile, corn yields are mixed as a result of this summer’s drought.

2.http://www.brecorder.com/markets/commodities/america/87815-cbot-wheat-rallies-closes-above-50-day-moving-average-.html

I recommend this article because it concludes all the information about import and export ban announced by governments that can affect the price of crop this week. For example, Ukraine’s Agriculture Minister said the country would ban wheat exports from Nov. 15 following a weather-damaged harvest. Syria’s General Establishment for Cereal Processing and Trade said it was seeking 100,000 tonnes of soft wheat of bread-making quality in an international tender.

3. http://www.nytimes.com/interactive/2012/10/28/nyregion/hurricane-sandy.html

I find an article about Hurricane Sandy. It’s a updating website, tracking the storm, written by The New York Times. This is a disaster and it will affect the demand and transport for food. It will push the price up. I’m sure you will find it useful when you want to find out how the Hurricane can affect the price of crops.

This week, I’ll still focus on wheat. I believe that the price of wheat will still go up.

One reason is that the harvest of wheat is coming to an end. However, the most important reason is that Hurricane Sandy will attack the east coast of America. There will be more wheat needed and the transport of wheat will be inconvenient. Sandy is a very severe disaster that may cause severe floods. I’m afraid the CBOT may stop trading for days.

Another reason may raise the price up is that Storms have pelted the South American grains powerhouse since August, raising uncertainty about crops needed to bolster food stocks after dry weather slashed output in other major producers such as Russia, Australia and the United States. Argentina’s upcoming wheat harvest is expected to shrink 17 percent from last season to 11.5 million tonnes, the Agriculture Ministry said last week, as farmers skirt export curbs by shifting to other crops. I’m afraid this week, the bad weather is the most important factor that can decrease the supply of wheat and increase the price.

Third reason is that Taiwan Flour Mills Association tendered to buy 104,000 tonnes of milling wheat from the United States for shipment in November and December. The future price of November and December will increase too because there may be less available by that time.

So, this week, I will still go long on wheat and I’m looking forward to get more reward this time.

This week, my equity is $38360.88. I earned $2400 for the four long contracts of wheat (gain $600 each). So, what went right?

I went long on wheat two weeks ago and I’m glad to find out that the price of wheat went up. There are many reasons for that. I think the most important one is that the harvest of wheat is coming to an end. As time goes by, it is obvious that the price of wheat will go up.

There is some new information about wheat last week. Board of Trade wheat futures rose 1.6 percent to their highest level in more than three weeks on Wednesday on hopes that Ukraine’s export ban would raise demand for US supplies on the world market. Ukraine’s Agriculture Minister said the country would ban wheat exports from Nov. 15 following a weather-damaged harvest. Then, the price of wheat will go up and speculators will buy more. The future price of wheat will go up. Besides, Syria’s General Establishment for Cereal Processing and Trade said it was seeking 100,000 tonnes of soft wheat of bread-making quality in an international tender. With the rising demand of wheat all over the world for last week, it is clearly that wheat will be more expensive.

1.http://www.brecorder.com/markets/commodities/america/86790-cbot-corn-gains-as-us-harvest-nears-end-.html

Knowing the harvest progress is very important. We need to know what’s going on before making any decisions. Occasional showers over the next week to 10 days will cause minor slowdowns in harvesting the US corn and soybean crops, an agricultural meteorologist said. “The bottom line is they’ll fall short of perfect harvest weather but will be able to chip away and be close to complete by the end of the month,” said John Dee, meteorologist for Global Weather Monitoring.

2. http://www.agweb.com/article/feed_demand_for_wheat_to_soar/

Wheat is consumed both by human and livestock. The U.S. wheat supply will dwindle as poultry and livestock producers continue to turn to wheat as an economical feed source. In the same report, USDA projected a reduction in the global wheat supply. Total world wheat production is now estimated at 653.05 million metric tons, down slightly from last month’s estimate of 658.73 million metric tons and more than 7 percent smaller than 2011-12 world production of 695.69 million metric tons.

3. http://www.agweb.com/article/cme_group_to_acquire_kansas_city_board_of_trade/

CME Group, the world’s leading and most diverse derivatives marketplace, and the Kansas City Board of Trade, the leading futures market for hard red winter (HRW) wheat, announced they have signed a definitive agreement under which CME Group will acquire the Kansas City Board of Trade (KCBT).

As the US soybean harvest at 71 percent complete, there is no more important news about soybean released. I’ll just keep it until there is something new released. Next week, I’ll pay more attention on wheat.

For wheat, there is something important that we should pay attention to. US wheat futures rose on Thursday on better-than-expected export sales as well as some concerns about dry conditions hurting harvest prospects for recently seeded winter crops, traders said.

Besides, the US Agriculture Department said weekly export sales of wheat were 410,000 tonnes, topping forecasts for 250,000 to 375,000 tonnes. A week ago, wheat export sales were 279,900 tonnes.

Third, the U.S. wheat supply will dwindle as poultry and livestock producers continue to turn to wheat as an economical feed source. Increased demand for U.S. wheat in the current crop year is expected to more than offset the growing wheat supply. Wheat export, wheat for domestic food use, and wheat used for seed are expected to remain relatively flat from last year, but feed use will soar, according to USDA.

It is obvious that the price of wheat will go up next week. The strategy for next week is to go long on wheat. At the same time, I will keep an eye on soybean. As soon as the price of soybean go down, I’ll offset quickly.

This week, my equity is $36362.77. I went short on four soybean contracts two weeks ago and as the time goes by, I begin to lose money. Each of them is losing $487.5. The reason is quite simple. As the harvesting is coming in an end, the price of will begin to rise. At the same time, there are several important information that may be the reason affected the price of soy beans last week.

Additional pressure from talk of better-than-expected US soybean yields as the harvest winds down. Ahead of USDA’s weekly crop progress report expected later on Monday, analysts surveyed by Reuters pegged the US soybean harvest at 71 percent complete. This is very important. Knowing the harvest progress can help us finding out the trend of price. If the harvest will be end, the price will increase significant.

At the same time, cold front that moved into southeastern Brazil over the weekend will likely bring light rainfall to the country’s main soy belt this week, providing welcome soil moisture – forecaster Somar. Brazil is expected to surpass the United States in 2012/2013 as the world’s top soybean producer. In long run, Brazil can produce more soybean in the future. The price will decrease years later.

NOPA reported US stocks of soyoil in September at 2.043 billion lbs, down from 2.168 billion in August but slightly above the average trade estimate of 2.012 billion lbs. This can slightly rise the future price.