Basic Knowledge on Soybeans
COUNTRUES | PERCENTAGE of world production | PLANTING | HRVEST |
United States | 38% | Soybean crops are planted beginning in late April and last through June. | Soybeans are mainly harvested in late September and are finished by the end of November. |
Brazil | 25% | Mid-August through mid-December. | February through May. |
Argentina | 19% | October through December. | April through early June. |
China | 7% | Late April through mid-June. | September through early October. |
Cool Source of Information
Sep. 24, 2012
From this website, we can find latest news about agriculture commodities.
Sep. 25, 2012
http://www.reuters.com/article/2012/09/25/markets-grains-idUSL4E8KP4JC20120925
What did it say?
1. Earlier harvest on dry U.S. Midwest Weather. (The soybean harvest may be 14 percent smaller at 2.634 billion bushels.)
2. “The vast majority of farmers are looking to sell soybeans right out of the field to take advantage of record prices at harvest.”
3. “Soybeans are falling on fears of less Chinese demand for U.S. supplies,” said Greg Grow, the director of agribusiness at Archer Financial Services Inc. in Chicago. “Economic growth is slowing more than expected in China.”
4. A weaker dollar—EQ3
The expectations that U.S. supplies will be tight in the months to come.
Advancing Midwest harvest and good yieds”Farmers are going to hold on to their beans, and it could get tight between now and February,” said Gerry Gidel, chief feedgrain analyst at Rice Dairy LLC in Chicago.
5. U.S. soybeans ended marginally higher on Tuesday after a seesaw session, which saw talk of end-user demand and a weaker dollar lend support though gains were limited by an advancing Midwest harvest and accounts of good yields.
What can I get?
The supply of soybean will increase, and the instant supply of soybeans increase a lot and the price maybe go down in the short term.
Because China is one of the largest importer countries of soybeans, the worldwide demand for soybeans may be less, which would lead to the decrease of price.
And the weaker dollar will boost the purchase abilities of other countries. Thereby the demands of importer countries will be more. At the same time, positive outcome of harvest encourage farmers to hold on their beans for higher price in the future.
For this week, I checked the price change on GMEGroup.com by minutes and found that the future contract price of soybeans dropped gradually.
My reaction:
At first I offset all of my trades before, Because this week I just want to focus on I checked Gulsana’s blog and she said that she believed that holding a long position on soybeans is a right choice for this week. However, based on above analysis, I think, in the short term, the price will go down but may go up very soon. Therefore I decided to buy a short position on S3F and monitored the price change every couple of minutes.
Position |
Submit Time |
Submit Date |
Type |
Contract |
Quantity |
Long |
148 |
09-25-2012 |
Market |
C4U |
1 |
Long |
148 |
09-25-2012 |
Market |
SM2V |
1 |
Sep. 26, 2012—Sep. 27, 2012
http://www.agrimoney.com/news/dismal-export-data-send-corn-futures-lower-again–5040.html
You can find news as well as daily price change on many crops.
What did it say?
1. The data about future contract shows a positive trend on price.
2. Soybeans for November recovered losses to get back into positive ground, up 0.75 cents at $15.73 ¾ a bushel with an hour or so of trading to go in Chicago.
What did I get?
1. The data about future contract shows a positive trend on price.
2. Soybeans for November recovered losses to get back into positive ground, up 0.75 cents at $15.73 ¾ a bushel with an hour or so of trading to go in Chicago.
What can I do?
I found that the January contract price of soybeans began to rise according to the data on GMEGroup.com, and I thought the increasing price of soybeans would come very soon. Therefore on Sep. 26, I bought a short position on S3F and then I offset my it on Sep.27.
Position |
Submit Time |
Submit Date |
Type |
Contract |
Quantity |
Short |
231 |
09-26-2012 |
Market |
S3F |
1 |
Long |
1110 |
09-27-2012 |
Market |
S3F |
1 |
Sep.28
http://usda01.library.cornell.edu/usda/current/GraiStoc/GraiStoc-09-28-2012.pdf
The release of the crop reports typically coincides with the relatively large price changes. So paying attention to the report release date on this website will have a big effect on the prediction of crop future and spot prices.
What did it say?
Old crop soybeans stored in all positions on September 1, 2012 totaled 169 million bushels, down 21 percent from September 1, 2011. Soybean stocks stored on farms totaled 38.3 million bushels, down 21 percent from a year ago. Off-farm stocks, at 131 million bushels, are down 21 percent from last September. Indicated disappearance for June – August 2012 totaled 498 million bushels, up 23 percent from the same period a year earlier.
What can I do?
On Sep. 28, the release of crop stock report involved a big change on wheat, corn, soybeans and coffee. The price change reached around 30.
My reaction:
I instantly bought 2 long positions on S2X (November Contract) and the price in was 1594.
What went wrong:
However, my reaction was a little bit late. If I choose to hold a long position on November Contract on Sep.27, the price-in price would be 1579, but I bought it on Sep.28, the price rose up to 1594 quickly. Therefore I lose the chance to realize more gains.
Long |
1112 |
09-28-2012 |
Market |
S2X |
2 |
Overview of data
Closed Contracts
Date In |
Date Out |
Contract |
Position |
Price In |
Price Out |
Gain / Loss |
2012-09-12 | 2012-09-20 |
W2Z |
Long |
883 |
876.5 |
-326 |
2012-09-13 | 2012-09-25 |
C4U |
Short |
613.75 |
610.75 |
149 |
2012-09-17 | 2012-09-20 |
SM2V |
Long |
506.1 |
495 |
-1111 |
2012-09-20 | 2012-09-25 |
SM2V |
Short |
495 |
484.2 |
1079 |
2012-09-26 | 2012-09-27 |
S3F |
Short |
1588 |
1579 |
449 |
Total Gain/Loss on closed contracts |
240 |
Open Contracts
Date In |
Contract |
Type |
Position |
Price In |
Committed |
Contract Value |
Gain/Loss |
2012-09-28 |
S2X |
Market | Long |
1594 |
2700 | 80050 | 350 |
2012-09-28 |
S2X |
Market | Long |
1594 |
2700 | 80050 | 350 |
Total Gain/Loss on open contracts |
700 |
Daily Change on November Contract.
Sep 28, 2012 |
1598.38 |
1576.13 |
1613.63 |
1561.50 |
1.40% |
Sep 27, 2012 |
1576.25 |
1577.88 |
1583.88 |
1557.63 |
-0.11% |
Sep 26, 2012 |
1578.00 |
1610.38 |
1610.88 |
1565.13 |
-2.09% |
Sep 25, 2012 |
1611.63 |
1607.75 |
1625.38 |
1604.38 |
0.25% |
Data comes from :http://www.forexpros.com/commodities/us-corn
The Road Ahead
United States Department of Agriculture’s (USDA) Friday report shocked future contract trading market. However, after the almost limit-up of corps, the effect of the report is weaker now. Therefore the first step is to offset my long position on soybeans. Next week, I will focus on wheat and corn. Because they are substitutes, the price change will coincide with each other. According to the storage stock, I will hold a short position on December contract and then offset it and buy a long position on July contract. However, I will adjust my strategy based on the update data on Agrimoney and GMEGroup website. For this week, I don’t want to make more predictions because I am not sure whether United States Department of Agriculture’s (USDA) Friday report is true or not. I will test it next week.
Good job on your analysis. I am currently focusing on wheat and corn too, except I’ve taken an opposite position.. by shorting rather longing after a dip in prices. My reaction was too late also.. by the time I knew the price drop, both of these commodities prices have already reached limit-up this past Friday! Better for us to HEDGE!!
Hi Laura,
I see you worked hard to get this done. I appreciate your work. Well done. Hope you can gain big this week.