Raw Materials Commodity Investment Guide-Agricultural Products

1. Production distribution of bulk commodity Huang Xiaoyu

1. Production distribution of commodity Huang Xiaoyu. Huang Xiaoyu that you often hear refers to crops such as soybeans, wheat, and corn. According to statistics from China Food Network, the main producing areas of soybeans are Brazil and the United States. The main producing areas of corn are China and the United States. As for the imported part, China is The world\’s largest grain importer, especially soybean imports, is several times that of other regions. Therefore, China\’s economic situation has a greater impact on soybean prices than wheat and corn.
In 1996, China turned from a net exporter of soybeans to a net importer. Imports have increased year by year, and its foreign dependence has exceeded 80%. In theory, northern China is the area where soybeans are grown. However, severe water shortage and drought problems make it difficult to grow soybeans in North China.
20% of China\’s domestic demand for soybeans is used to extract oil, that is, soybean vegetable oil. The remaining 80% is mainly used to feed livestock and poultry. For example, imported soybeans are mostly processed by crushing operators, and the processed soybean meal is used as an important component of pig feed. .
According to the volume table of major imported commodities in March released by the General Administration of Customs of China on April 18, soybean imports showed a decline in both the monthly volume and the annual cumulative volume compared with the same period last year. We observe the futures price of soybeans from 2024 to May 3. So far, it has basically been a weak consolidation trend.
2. USDA Monthly Crop Report According to the U.S. Department of Agriculture (USDA), the \”Monthly Crop Report (WASDE)\” will be released around the 10th of each month to provide the basic supply and demand of major crops such as soybeans, wheat, and corn in the world and in the United States. Commodity traders and investment institutions will pay special attention to the above-mentioned data, that is, the USDA supply and demand report, because they can know the changes in supply and demand in the agricultural product market.
Taking the WASDE report published in April as an example, the opening stocks of soybeans in April for the 2023/24 season were 264 million bushels, the production volume was 4,454 million bushels, the consumption volume was 4,114 million bushels, and the ending stocks were 340 million bushels.
Through the above data, we can also calculate the inventory-to-consumption ratio, which is the ending inventory divided by consumption. Therefore, the inventory-to-consumption ratio in April is 8.26%. Generally speaking, a high inventory-to-consumption ratio is more detrimental to prices. The reason may be an increase in inventory or a decrease in consumption.
3. Feng-XQ Quantitative Index Page of Raw Materials Three-Flow Flow explains what we can do if we want to observe the price trend of agricultural products. The following uses the soybean ETF as an example to draw high and low waves to help us observe the stock price of soybeans. Trend: ■ Extended reading: [Download XQ indicator page] Raw Materials Commodity Investment Guide – Agricultural Products Wave Indicator ■ Extended reading recommendation: Quantitative Trading Lazy Pack article to understand what quantitative trading is? ■ Extended reading recommendation: What is quantitative trading? How to teach yourself? Can you do quantification without writing a program? You can observe the trend from the wavy lines. When the price breaks through or falls below the key price, you can also grasp the current market situation at a glance. From the chart, you can see that the stock price is constantly breaking through the previous lows. It shows that the strength of the short side is relatively strong.

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