In this trading week I went short on both Nov. Soybean and Jan. Soybean on Thursday. And seeing Friday’s close price, my prediction about soybean price seemed right.

The USDA reported net export sales of 522,200 metric tons in the week ended Oct. 18. The sales were below traders’ expectations for sales in a range of 600,000 to 900,000 tons, according to a Dow Jones Newswires poll. This piece of report indicates a lot more soybean are actually in domestic market. Thus, I concluded that soybean price could be falling. But this might only influence price for a short term, so I went short only on Nov. and Jan. contracts.

The past week’s price showed that price of May contracts are actually rising, because farmers planted a lot of soybeans this year, and if no accident happens, large harvest is expected to come next May.

Reference:

http://futures.tradingcharts.com/news/futures/DJ_U_S__SOY__Beans_Ease_on_Profit_Taking__Export_Sales_Disappoint_187726008.html

http://www.grainews.ca/news/u-s-soybeans-fall-wheat-pares-gains-on-macro-worries/1001782004/

I found a very help website TradingCharts.com this week.This became the only source I referred to in the past trading week because I found it highly user-friendly.What makes it unique is that on the main website of it there is a “Quick Quotes” column, in which we can select the commodities of our interests ( corns, soybeans and wheat). All price charts and news articles are popped out after selecting.

http://futures.tradingcharts.com/

“Along with macroeconomic concerns, soybeans were pressured after private analytics firm Informa Economics raised its forecast of U.S. 2013 soybean plantings to 79.987 million acres, which if realized would be the most on record.” In addition, Soybean prices now are highly related to weather problems of South America.

I have not offset my  two short contracts of soybean yet, and I am uncertain of predicting the future prices. Soybean markets have been more likely to fluctuated than the other commodities(corn and wheat) we are trading.

In the past week’s 501 lectures, Professor mentioned corn and soybean prices are on average 60% positively related( because of they are substitutes for major feed ingredient). So I would offset the soybean contracts I am holding with trading corns.

References:

1.http://www.grainews.ca/news/u-s-soybeans-fall-wheat-pares-gains-on-macro-worries/1001782004/

2.http://futures.tradingcharts.com/news/futures/DJ_U_S__SOY__Beans_Ease_on_Profit_Taking__Export_Sales_Disappoint_187726008.html

As I was wondering what happened to corns to have such big price fluctuation in this two weeks, this article gives such a fully explained analysis:

http://www.agrimoney.com/news/corn-soy-prices-retreat-on-informa-crop-revisions–5073.html

I have concluded that what made me lose money in the first two trading weeks is not following the upcoming USDA report, so I have downloaded a Schedule of 2012 release dates of cotton reports issued by the U. S. Department of Agriculture, according to which USDA is coming out with another report on 11^th October and I get to make moves as the coming report!

http://usda.mannlib.cornell.edu/usda/ams/CNAASRD.pdf

http://www.agrimoney.com/news/wheat-output-poised-for-significant-rise-in-2013–5063.html

What made me lose money in the first two trading weeks is not following the upcoming USDA report, so I have downloaded a Schedule of 2012 release dates of cotton reports issued by the U. S. Department of Agriculture, according to which USDA is coming out with another report on 11^th October and I get to make moves as the coming report!

Some comments of fellow classmate make me realize I have not trade wheat yet. So my interest kind of lays on researching on wheat. Wheat price has increased at the end of this week and Goldman Sachs raised its target for wheat prices above $10 a bushel, thanks to a tumble in US inventories to multi-year lows, and forecast recoveries in corn and soybeans to record highs. The investment bank lifted its forecast for Chicago wheat prices, on a three-month horizon, to $10.25 a bushel, after US Department of Agriculture data on Friday showed US inventories of the grain far lower than the market had expected. I will buy December wheat.

http://www.agrimoney.com/news/wheat-prices-to-top-$10-a-bushel-says-goldman–5048.html

I will probably also buy December corn because the shrinking harvest and there will not be a harvest season by December. And hedge by selling December soybean.

http://www.agrimoney.com/news/corn-soy-prices-retreat-on-informa-crop-revisions–5073.html

Actually this was writtien on Sept. 30 and somehow it was saved in the draft box instead of being published… Here we go…

I went short on Corn (C3H) this week, it went on as I predicted in the beginning days but on Friday price in one day increased by (719.50-748.25)/748.25=3.842%, because of the release of annual stockpile data report.

Domestic corn inventories totaled 988 million bushels as of Sept. 1, the lowest level in eight years, the Department of Agriculture said Friday in a closely watched quarterly grain-supplies report. Corn supplies were below the average analyst forecast of 1.126 billion bushels in a Dow Jones Newswires poll this week.

There’s also an interesting trend about Euro to U.S. Dollar exchange rate:

Which indicates demand for U.S. dollars would keep going up.  Thus, prices of U.S.domestic commodities are supposed to rise.

In the coming week, the first thing to do is to offset the short contract, because the price is most likely to continue running up.

http://online.wsj.com/article/SB10000872396390443389604578024180178198160.html

http://www.forecasts.org/euro.htm