The Road Ahead – retreat?
The combination of factors suggest me I should take a “retreat” attitude this week; However, there’s quite a bit of information suggests that there will be further price drop in corn, soybeans and wheat futures. First of all, US dollar is strengthening [1]; US economy is improving and expecting a good recovery. Secondly, the oil price has dropped due to a forecast of reduced global demand by International Energy Agency[2]Thirdly, according to the news gathered below, yet, not exhaustively, it does seem that the futures prices tend to drop this week.
Corn:
- Argentina’s revamped corn export policy[3] (-)
Soybeans:
- More export sales (+)
- Higher production/ good supplies from South America (e.g. Brazil, Argentina )[4] (-)
- Cut in palm oil export tax next year in Malaysia leading to the drop of palm oil price [5] (-)
- Good opportunity of open market access and predictable trade access in the Asia-Pacific region with Canada entering Trans-Pacific Partnership [6] (-)
Wheat:
- Unexpected drop in exports [7] (-)
- Reduced projected production in Russia and Australia (+)
- Argentina’s revamped wheat export policy which leads to immediate increasing wheat planting [3] (-)
1.RTTNEWS. (2012, Oct 15). U.S. Dollar Strengthens Against Majors. Retreat from http://www.rttnews.com/1982877/u-s-dollar-strengthens-against-majors.aspx?type=cm&utm_source=google&utm_campaign=sitemap
2. Kwiatkowski, Alexander. (2012, Oct 14). TOP Oil Market News: Crude Falls After Iran Offers Nuclear Talks. Retrieved from http://www.bloomberg.com/news/2012-10-15/top-oil-market-news-crude-falls-after-iran-offers-nuclear-talks.html
3. Ahad , Abdul (2012, Oct 13). New Argentine corn, wheat rules help farmers sales. Retrieved from http://www.brecorder.com/markets/commodities/america/85668-new-argentine-corn-wheat-rules-help-farmer-sales-.html
4. McFerron, Whitney. (2012, Oct 12). Soybeans Drop as Supply Concerns Ease After USDA Report. Retreived from http://www.bloomberg.com/news/2012-10-12/corn-trims-weekly-advance-on-speculation-rally-may-cut-demand.html
5. Ahad, Abdul. (2012, Oct 13). Palm oil down in export cut news. Retrieved from http://www.brecorder.com/markets/commodities/europe/85652-palm-oil-down-on-export-cut-news-.html
6. The Crop Site. (2012, Oct 11). Trans-Pacific Partnership Entry Good News for Canola. Retrieved from http://www.thecropsite.com/news/12166/transpacific-partnership-entry-good-news-for-canola
7. McKiernan, Patrick. (2012, Oct 12). Wheat Futures Fall as U.S. Exports Decline: Commodities at Close. Retrieved from http://www.bloomberg.com/news/2012-10-12/wheat-futures-fall-as-u-s-exports-decline-commodities-at-close.html
