Cool sources of info

The first interesting info source comes from the DowJones Commodity News Select, via Comtex:

According to the DowJones Commodity News Select, it is interesting to note that, in general, grain market now has a tight-source of supply, particularly corn and soybean at the start of the harvest season.

It is evident that there is a decline in production of soybeans due to the drought in Brazil and Argentina, the largest soybean producers in the world this summer that occurred shortly after the drought in the United States.

As of the beginning of September, soybeans stocks are going to be tight despite the fact that soybeans have better yields in parts of the United States. The most recent USDA forecast indicates a 130 million bushels of harvest for soybeans, however, analysts expect that on average the USDA will report a higher figure of 132 million bushels. Nonetheless, the analysts’ forecasts ranged from 115 million to 152 million bushels.

In addition, after a week of fallen prices in grain and soy futures, there is a general expectation that prices will rise.

Another interesting source of information is from a trade recap on Farming News on September 24^th 2012. There were concerns in the world market about the slowdown in demand for corn. “The USDA states more corn has reached maturity, compared to a year ago and on average 39% is harvested, compared to 12% last year. Supply for corn has improved substantially such which implies a technological improvement in corn harvesting.

Corn Futures prices in turn affects ethanol futures, which brings down prices. In addition, this article in Farming News illustrated various sources of information on increasing corn supply in the international markets. According to the Ukraine’s Ag Ministry, corn exports for the marketing year to date are 1.29 million tons, compared to 58,300 tons from July 1 to September 21, 2011.

Furthermore, I anticipated that wheat prices would fall as it has a strong correlation to corn futures prices. As reported by the DowJones Wire, South Korea’s Nonghyup Feed Inc. bought 65,000 tons of optional origin corn, adding the corn price for delivery to East Asia is at a $20 discount to wheat. The Philippines Department of Agriculture projects a potential decrease in wheat cattle feed imports due to a surplus in corn production. In effect, the country would be exporting corn in 2013.

Although the information above are useful, I need to be careful not to focus too much on one aspect of wheat and corn market supply. Thus, it is necessary to be cautious about the information sources I read in the news and analysts reports, and thus the ability to make credibility judgments is crucial.

Website: http://www.farms.com/news/soybean-corn-wheat-futures-prices-lower-monday-55470.aspx