Well, I did mention that I made losses during the middle point of the week, yet I still had huge gains in my account by the end of the week. The majority of this came from the prediction by @ArlanFF101 and others that markets should see a rally from the falls of Wednesday so I decided to take long positions on all of wheat, corn, and soybeans on Thursday. They did not see the recovery that I had hoped, but I decided to stick with my value of trusting my decisions and held onto the long positions even though there was to be a USDA report on the Friday. That paid off with huge amounts of gains in all of the commodities most especially corn going limit up. I will be closing all of those trades on Monday morning. However, as of this moment I am still incredible tempted to maintain my position in corn due to it going limit up and the high potential for it to continue jumping on Monday. There is a strong chance that I will take another long position on corn.

I would strongly suggest that you follow Arlan Suderman on twitter @ArlanFF101. He has a strong background in the grains market and provides great commentary on various changes that are happening in the market. Although he does not appear to be the best at “predicting” per se, he is very good at reporting changes in the market and seems to provide very good background as to why changes happen. He will often give reports every hour or so on twitter about the daily status of the 3 commodities that we are trading. This in turn displays his strong focus on these commodities, which is invaluable to us.

There was quite a bit of good that occurred later in the week, especially with my strongly positive returns for the week. However, what I would like to focus more on is how much better I could have done this week had I followed through with one of my core values.

First off, before getting into an update on my week in our investment game, I should tell you a little bit about my background in “investing.” I have completed the Canadian Securities Course, which is a basic requirement for working in the financial industry in Canada and gives you a small background into various elements of investing. However, outside of that, I have no other real experience most especially in commodities. On the other hand, I do have experience in an industry that I consider to be incredibly similar to the investing that we see here and that is in sports betting. I was not like the majority of betters who would simply select a winner as the most of my bets would be picking teams whose payouts would decrease and then picking the other team whose payouts would increase so as to guarantee myself money before the game ends. Essentially, this is the same as making a long or short position and then closing it as prices (payouts) changed in my favour. I have developed my own set of “core values” that I would follow and I believe that they should be transferable to investing and every week I hope to share them with you.

So enough of my rambling. Let’s get into my idea of being the first to react. In the beginning parts of the week, I saw a little bit of movement up and down in my investments, but I saw the biggest loss on Wednesday when I decided to act upon the news of new austerity measures put out by EU nations, which would theoretically cause prices to fall in commodities market. This would be caused by a downward shift in the demand curve due to cuts in the budgets of the governments. However, I was over 5 hours late to react to the news and by the time I had gotten into the market on short positions in soybeans and wheat, it was too late. In fact, they had both begun to rebound and I lost approximately $1k. However, had I been quicker to react (approximately 1 hour after the news) I would have seen a gain of over $3k.

Want to hear some stories that I have that led to this little value of mine? Then ask me to tell you in the comments!

http://www.huffingtonpost.co.uk/2012/09/26/spain-riots-protesters-clash-riot-police_n_1915225.html?utm_hp_ref=uk

With the release of reports that soybeans would be having a very good crop in November, I decided to take a short position. The idea behind this was that an increase in supply should lead to a lowered price for soybeans. However, by Sept 21st, the prices did not follow this pattern and their prices actually rose. I was confident in my analysis though, so I did not close my position. My confidence paid off and prices saw their largest price drop in a year by falling 5%. I closed my position at that point with gains over $4k. Following the closing of my position, soybean prices saw a bit of a rally so I was able to get out at the right time. This is clearly how everything went right. The source that I used was well respected and the prices followed with the news. I followed with my knowledge of basic economics and it clearly helped. The main key was that I got into the market right when the news came out, before other investors were able to get in. I would strongly suggest following @WILLIE1701A who is the person that first tweeted about the surprisingly large harvests of soy and suggested that prices would fall. He has also suggested that corn supplies would be lowered in the near future so I have also longed corn and will wait and see what happens by Monday. The resource that I used is incredibly useful not just for the quality of information that you get, but also the mix of both reporting of news and rumours. There is also good variety of types of information that is distributed by him. For example, one day he will mention different weather patterns in Brazil or the U.S.A, but then the next will start to mention the latest reports from Russia regarding the rumours of them creating new export bans on different crops. However, the most useful thing that I find about this resource is that he also explains the logic behind the conclusions that he occasionally makes. As a beginner, it is invaluable to get the news, but also some help on how this may affect markets or even explanations as to why recent price changes had occurred. I had previously longed corn earlier in the week for similar reasons involving Russia’s recent stance on exports, but corn prices did not follow so I made a stop loss trade. However, I have decided to continue on my previous idea in the same way that I stuck with soy prices even when they did not work in my favour.

http://www.agrimoney.com/news/russia-may-curb-grain-exports-after-all–5014.html?utm_source=twitterfeed&utm_medium=twitter

http://in.reuters.com/article/2012/09/17/markets-grains-idINL3E8KH41Z20120917

https://twitter.com/Willie1701A

Why will the creation of the Gateway pipeline from Alberta to Kitimat BC will raise the price of crude oil for Canadian refineries?

In an interview with the CBC, the Alberta Federation of Labour argues that the creation of the Gateway pipeline will increase the price of crude oil for Canadian refineries through a multitiered effect. First, by creating the Enbridge Pipeline, Canadian crude from Alberta will be more capable of being traded. This newly created access to markets will allow for the crude oil to be transported to a new trading partner in China that offers a higher price called the: “Asian premium,” to the Canadian supplier of the crude oil. Then, through this high amount that is offered to the supplier, said supplier will thus increase the price that it charges to the Canadian refineries for their “feedstock,” the crude that they refine. In doing so, the overall costs of production will be increased for the refineries..

AIH Producers, (2012). As It Happens: Sept 4 Part 3. [Audio podcast]. Retrieved from http://www.cbc.ca/asithappens/episode/2012/09/04/the-tuesday-edition-45/