Hello. I wasn’t really aware this was our last week of trading. It seems like i’m gonna end the game pretty much with the same money as when I started. I lost a lot of money on my first week of trading, but as coffee prices are going down the normal trend given the current coffee industry situation my loss is becoming smaller. I did not get back all my money
on coffee but combined with the wins I had from trading other commodities I am now on the positive side of the rankings.
As I talked on my previous blogs, coffee prices are very volatile. As seen on the following figures this week they fell from 117 to 112 cents/pound. Which transformed my 7% loss to a 2% loss in coffee.
I have learned a lot from this game. My main lesson is that markets almost immediately discount or account for most of the factors that are supposed to affect price. We sometimes think prices are going to move because of a certain situation when prices already moved because of that situation. Before we even knew about it! Of course markets always over/under account and it’s precisely there where we can make good profits/losses. But, well, being able to determine this is every traders dream!
What can we expect for coffee…..
The following article is very interesting if you want to understand a bit about coffee price fluctuations in time. I recommend to read it. It summarizes what I think will happen, which is the story of coffee always and kind of goes like this.
- There is a huge surplus of coffee at the moment so prices will keep on falling for a bit and stay low for some months.
- Farmers will receive for their coffee less than its cost, so they will not fertilize and take care of the plantations anymore. Some will abandon them and farm something different.
- As this happens the surplus will start to shorten and prices will start to rise again during the next harvests and like a pendulum they will sore in a few years as farmers cannot suddenly start planting again because coffee trees take several years to yield.
- As everybody planted coffee to take advantage of high prices, within a few years we will come back to today’s situation, with record crops like the ones metioned on the article.
http://www.agrimoney.com/news/supersafra-talk-sends-coffee-price-to-4-year-low–6413.html
I hope we can keep on trading even if the official game is over.
Hasta luego!