In this trading week, I found an interesting commodity future market website- Barchart, under which the Grain section might concerns MFREers the most:

http://www.barchart.com/commodityfutures/Grains

The interesting part about this website is that it has blogs components, in which we can read about blogs of people who trades as their jobs. I am not saying those people’s blogs have to be accurate predictions, but they probably have better accuracy than us, or at least than me:)

Informa lowered its estimate for the US corn crop by some 450m bushels 10.7bn bushels, citing a yield which it saw at 122.4 bushels per acre, below the previous forecast of 127.0 bushels per acre.

For soybeans, the yield estimate was raised, but by a 0.8 bushels per acre to 37.8 bushels per acre, adding an extra 65m bushels to the crop.

The comments follow a US Department of Agriculture assessment that only 40% of winter wheat seedlings were in “good” or “excellent” condition as of Sunday, the lowest reading since records began in 1985.

Below are the actions I am going to take:

1. Short on corn

2. Long on soybean

3. Long on wheat

References:

1.http://www.agrimoney.com/news/socgen-upbeat-on-wheat-prices-as-us-crop-struggles–5170.html

2.http://www.agrimoney.com/news/grain-soybean-prices-dip-despite-informa-data–5172.html

There are several website that I started using in the past trading week:

1.  CME Group. http://www.cmegroup.com/

This user-friendly website gives information on a overall glimpse, not in too much details though. But it does not have to have a general idea first to make further movements.

2.FOREXPROS   http://www.forexpros.com/news/commodities-news

On this website, I found it usually contain an “weekly outlook” article to predict the next week’s market.

http://www.forexpros.com/news/commodities-news/grain-futures—weekly-outlook:-november-5—9-240264

In this particular journal, it not only summarized what happened to the key grain commodities last week, it also predicts the future price pattern of the following week with a lot of detailed info. For example, it calls for attention for us to look at the USDA scheduled release on its updated crop estimates on November 9. It also offers how weather conditions are related.

In the past trading week, I traded these contracts:

I shorted on soybean because I read articles about Soybean futures trading levels going down as well as cash market deliveries decreasing. By the positive profits I’ve made, I made the right prediction last week. In addition, on this Friday, a new release has shown that the actual harvest level is much more than estimated, which decreased soybean price further more: “For soybeans, the yield estimate was raised, but by a 0.8 bushels per acre to 37.8 bushels per acre, adding an extra 65m bushels to the crop.” However, the fact that March soybean price decreased while December soybean price raised confused me.

I went long on Corn to reduce the risk of shorting on Soybean, for we learned from Jim’s class that these two commodities’ prices are of 60% possibility positively related. And it turned out a release came out that corn harvest level were smaller that estimated. However, as timing matters, the two contracts I made has opposite signs of profits.

References:

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

2.http://www.agrimoney.com/news/grain-soybean-prices-dip-despite-informa-data–5172.html

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