Month: October 2012

I have long believed the corn price is too high and went short on Monday. Finally on Friday, the price went down a little bit. The reason may be for the Mexican stock released corn futures.

The price of corn this week remained tepid. Nothing new information allowed it to adjust its price to a higher place. It is believed that the price of corn in a long term is till upward base on the demand and short supply in cash market.

However, one thing should be noted is that 200,000 contracts of corn are still holding in the hand of funds. We need to take safe protection against a sudden correction of corn price in a relatively short run.[i]  Specially, This thing had happened last year.

Base on this potential tragedy, it is may be safer not to invest so much on corn. Soybean is an alternative, but more information is needed.

1. http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/chinas-growth-forecast-chills-commodity-markets/article551340/

I found the global and Mail’s business section is helpful in decision making!

2. http://www.theglobeandmail.com/globe-investor/funds-and-etfs/funds/commodities-put-canada-in-the-drivers-seat/article566597/

Another good article in global and mail that i recommend everyone to have a look.

last week i had a expectation that corn and soybean will slump down in this week. it turns out that though they didn’t slide down largely, but still decline a lot.

At the first two days, both of these two commodity went up quiet a lot ( their price already high). Hence  I entered into the market at corn’s highest price  ready to go short. ( i am not sure about soybean, had no gut feeling on that)

finally, at the end of this week, corn price falls from 765 to 738. I closes the transaction at a relatively low price and gain a little.

Though the price is still decreasing, I am not greedy. That’s what i went right this week.

Last week, Soybeans[i] rose the most in five weeks on signs that demand is increasing for supplies from the U.S., the world’s biggest grower and exporter.  It’s lucky I capture the gain last week.

However, though the report higher demand of soybean, it was in the last week. The market has reacted to the new. Plus, we are transact in short periods, technique analysis would be more important.  Compare to the history price, I believe the price is sure to go down in the coming week. So, in the next day, I will go short with corn for 2 more contract and also go short with soybean.

Besides, I found a trick in the Tradesim: if we transact out the trading time of system, the system will lag it until at the end of the next trading day. However, if we transact within trading time, it will execute  half an hour later. Hence, if anyone wants to get order timely, don’t place the order the day before and hope system will execute it when trading opens. Do it during the trading time!!

Good luck, every one!

The balance of this week

this is this week’s transactions,ending with a gain of 3000.

During the last weekend i went short with both soybean and corns. however,when i found that the corn and soybean price is declining sharply in the morning of monday, i closed soybean and switch to long soon, before it occures any loss. So you can see the – 501 above, not such a big loss. soybean price continues to rise  in the following week turns out i was right.

What i went wrong is that i didn’t close the corn contracts the same time i close the soybean contract, stupidily hope it went another way.  but never mind i will hang in there, i believe the current price is too high, corn price will drop soon, it’s just a matter of time.

1. http://futures.tradingcharts.com/chart/CN/M

this website can provide you with all data of future commodity and also the  anlysis.

2. http://articles.latimes.com/2012/sep/28/business/la-fi-mo-corn-inventory-8-year-low-prices-jump-20120928

Los Angeles times. great reading materal. only for reference.

3. http://farmdocdaily.illinois.edu/2012/07/current_expectations_of_future.html

A very good webstie that prives agricultural information and analysis.

recently, the corn price has been driven up quiet crazy. All was due to the drought. estimation of yields is changing all the time and influenced market all the time. so question, how long this drought will last and how much it will influence on the harvest?

I thinks i may also went long in soybean. Because the soybean is the substitution with corn. The price direction will be the same for both of these two commodities. In a forseeable future, as can also observed from the historical data. It’s highly likely that the price will contiue fluctuated upwards.

Since i still got no experience in this future contract market. May be it will be more help to keep up with the news and information.

the sources i uesed are not so much.  since we are sacplers, in and out the market in a very short run, undamental analsysis are basice essentials, but not so important. what i valued most is the new information and technical analysis. below are the sources i use most often:

All about commodities:  everything about agriculutre commodities, planting and harvest pattern, news , data, reports.      http://commodities.about.com/od/profilesofcommodities/p/corn_futures.htm

Mundi index: historial data as far as 10 years. http://www.indexmundi.com/commodities/

Drover: cool information:  http://www.indexmundi.com/commodities/

Bloomberg:  i believe most of us will use this website. it will give us an overview of the market and latest informaiton.  http://www.bloomberg.com/

GOOD LUCK with everyone.

In the coming week, the main strategy is ” hedging”, which means i will share risks between 2 commodities: corn and soybean.

In my judgement, corn is most likely to drop in price for several days[i], because of the coming harvest in USA. Though, in the growing season matter how much the harvest is, it will for certain increase supply in the market and drag the price downwards. Besides, when you search on the Bloomberg with “corn”, the news titles were all harvest new in around world: china especially, as well as French. Though the price has declined in some degree, it is still on a historical high price, according to mundi index 10 years data[ii].

In a short run, on oct. 11, report on corn and soybean size will be released; it will be major supply information[iii]. So now we can in advance make a forecast, be ready ahead.

In the consumption, the exportation of corn has been accelerated in September. However it is still under the expectation of US government, also the ethanol consumption is still under last year’s level. Since it is only several percent below last year, and I believe market has reacted to that, I conclude that though the exportation will larger in October but has no many effects on price.

Beside corn, I plan to hedge the corn with soybean. Soybean’s production has been stable recently. But what’s wired is that China has purchased large amount of soybean. This confirmed my previous research results: Chinese government has released news that China’s has a sufficient soybean stock which is meant to suppress soybean price and also cover the truth that stock level is far below normal.   Hence it will be highly likely soybean price will rise in several days.  In another dimension, soybean price is somehow unreasonable unstable with large fluctuation. In this sense, it is suit for hedge purpose.

In conclusion, I will go long in soybean and at the same time speculate corn go short in the coming days.

last week i went long on corn of 4 contracts, hoped that the corn would have a surge on the  beginnign of last week (base on a information last last friday, i assumed nobody has reponsed to it).  What i went wrong is that  i inaccurately estimated the speed of market response.  Any information, as long as its last day’s, there is no need for you  to reponse to it today.

what i did right is that i stopped loss in a quick way.  The following trends in the week turn out i was i right. If not so, i would have been perfectly dead. now the price is 740!~At the same time i closed the long contracts on corn, i went long for corn only one contract ( test of water).It turned out also right. This morning i closed the transaction ( though don’t know when the system will excute), the current price is $740, however, if i can close it at $748, i can make a gain of :Not so much gain, but compare to loss, it’s better, isn’t it?