The prices are quite fluctuating this week…
This week there were two main tasks I planned. The first task is to offset the contracts basing on the predictions of our “demand and global outlook” group, because I want to make my profits and strategies sense and reenter market. The second one is to learn other strategies besides ours such as that of “technical analysis” and “exchange rate” groups, which I am planning to combine those strategies in the following weeks. Finally, I successfully offset my contracts on Wednesday with two bids, but I almost lost almost $10,000 mainly from the wheat board.
Corn
The price of corn is likely to drop because of following the possible fall in the global oil price. Moreover, since in the United States there are specific mandates of an ethanol ratio in gasoline, bearish- Mandates of oil remain, but potential loss of blenders (mixers of gasoline) credit in December, imply that ethanol production will decline. Based on the linkage of Ethanol and the price of corn, corn prices will fall.
Soybeans
Thailand and Indonesia have strong demands for soybeans from US rise by at least 13% to a multi-year high of 3 million metric tons in 2011-12 marketing year. Therefore
the rises of exports of US soybeans to South East Asia predict the soybeans price will increase.
Wheat
As Part of China’s 12th 5 Year Plan, it announced its focus the animal husbandry sector, revealing its desire to be more demand for wheat in this industry, which, to
some extent, will push up the prices of wheat. Even though other groups predict
the wheat price will decrease, I still go long for it to offset that contract this week.
During the previous weeks I got much confusion on trading game. That’s the reason I want to offset my contracts and enter futures market next week with brand-new strategies.
There were two bids this week(in order to offset all of my contracts)
First bid on 27 Sept: corn(2) at 648.9
Second bid on 28 Sept: soybeans(-2) at 1269.9 wheat(-3) at 699.9
Previous contracts: corn(-2) soybeans(2) wheat(3)
profit(corn)=(-2)*50*(638.4-648)+(-2)*50*(648-652.2)+2*50*(648.9-652.2)=1050
profit(soybeans)=2*50*(1258-1223.4)+(-2)*50*(1269.9-1223.4)=-1190
profit(wheat)=3*50*(640.6-638.6)+(-3)*50*(699.9-638.6)=-8895
total profits=1050-1190-8895=-9035
net balance=35115(previous week net balance)-9035=26080
Nice blog~U mentioned all the factors that may have influnces on the price of commodities…Looking forward to your calculation later….by the way, you did not talk about your detailed biding~price and units respectively then I’ll know how you combine the information with you bid~
Thanks for your suggestion, Lulu. I will improve my blog with the price and units later…and good luck for next week… 🙂
The market is very fluctuating this week…the price went up and down again to a low point. However I think that in the long-run corn price will increase because of the stable demand worldwide. I decided to offset the contracts as well..maybe starting next week. Good luck in the game Deron!
Hi, Yiyi, I have the same idea with you that the corn price will go up for sure, so going long for corn means “profits”! Let’s go long…haha
Deeply hurt by the wheat board as well!!!!
Anyhow, it seems like you did act your tasks for this week pretty well. We can all feel that you work on those strategies pretty hard! Welcome to Exchange Side! Hope I can do my work as good as you are.
Yeah, I’m going to refer to “Exchange Rate” as well, since it can also affect the market a lot…by the way, if u turn to “demand”, u can get a lot of funs! haha, Good luck!