The first week in the trading game was a quite a turmoil for me. I was too impulsive on my actions and entered the market without looking at the bigger picture. Drought in the US and Russia spurred me to long, so, I bought corn which is my favorite commodity of the three.

I started with a $40000.25 equity balance and went long on one December 2012 contract on September 13^th. The price was 782.75 cents per bushel and had since then moved in the opposite direction until I offset it on September 19^th (price was 750.00 cents per bushel on that day). The loss by my hasty behavior was (7.8275-7.5000)*5000=$1637.5. The significant decrease in the price of corn could be due to three reasons. The first factor is what I had just learnt in class; the ‘stock out’ situation. Harvest is on-going at the moment and therefore, price falls. One thing to note in a situation like this is that price does not fall due to the excess of supply of corn during harvest but is due the fact that storage for corn through the non-harvest months is costly. Secondly, the high corn prices in August have prompted cutbacks in livestock production, thus easing the demand for feed. Thirdly, the rain kept drought conditions from worsening and helped corn harvest a little. We can see that the decrease in corn price is due to a multitude of factors that are intricately woven together and I guess I will have to be more extensive in my research in the coming weeks.