There are several reasons to explain why I did not do trades this week.
Reason No.1: USDA is still closing. As an outsider of the market, it seems really hard to make decision of trade in the future market without any official information or data. Although there are many news (or we can call these as rumors) in the market, but it is difficult to recognize which is the truth. If we believe fake news, we will make wrong decision and suffer huge loss. Thus, I feel that becoming a market watcher may be a safe decision to avoid loss.
Reason No.2: After analyzing the candlestick graph, I found that the market is full of uncertainties, especially to soybeans.
The red candlestick means price increasing at that day; the green candlestick means the price decreasing at that day.
The daily candlestick chart of corn:
The candlestick chart of corn shows that the price trend is going down and the trading volume is relatively small. This means that the price of corn would not fluctuate a lot in the short run and the market seems to be not really interested in corn, if there is no unanticipated news or announcement. Therefore, it is a little bit hard to make profits since the time is the most scarcity resource of a master student.
The monthly candlestick chart of wheat
From this chart of wheat, both peak and trough of the price cycle are higher than the previous one. This indicates that the price trend of wheat is going up. In addition, the price of wheat is near the trough, so it might be a good time to long wheat and held it in the long term.
The daily candlestick chart of wheat
This chart shows that the upper shadows of wheat are relatively long. It means that the daily price fluctuation of wheat is relatively wide, but the closing price is much lower than the highest price of the same day. Thus, the climbing space of the wheat price may be limited in the short run. In other words, the price of wheat may roll back. The lower shadow of wheat, however, is also relatively long. This shows that the price of wheat will not roll back a lot. Therefore, when the price rolls back, it might be a good time to long the wheat.
The daily candlestick chart of soybean
The candlestick chart of soybean is quite similar to the chart of corn. The major difference of these two charts is that there is obvious peak and trough in this graph.
Thus, it is kind of hard for me (the new comer of the market) to predict the price trend of soybean in the short run. The price of soybean might go down or might be rebound.
Reason No.3: There were so many due days this week. This is the most important reason to explain why I did not do many trades this week. I feel so exhausted.
Highlight Events of this Week:
The Corn Futures fall to Three-Year Low On Friday, the price of corn future falls to the lowest point for the last three-years; the price of soybean went down the most this month. There are two reasons to explain why this happened. Firstly, as the largest producer of corn and soybean, the US is harvesting much more soybeans and corns than expected. The supply of corn and soybean increases dramatically. Another reason is that the market expects that the US government may amend a biofuel mandate, because the current mandate may exceed refiners’ ability to blend ethanol into fuel. If this is the truth, the demand of corn may decrease.
PS: I am not sure whether these reasons will cause the prices of corn and soybean to continuously decrease. Because the US government is still shutting down, we lack of accurate information to judge the authenticity of the news. The market is always full of rumors. In addition, China shows strong interests to import more soybeans and corns. The quantities of import from China may be another important determinant of the price trend of corn and soybean.
I hope that I have more time to watch the market in the next week, but probably not. The midterm weeks are coming.
Happy Thanksgiving Day.