This week the prices of commodities were quite fluctuating for several days. However, my strategies seemed to be not that clear since more than half of bids were failed. I have no idea what reasons were, but as for the strategies, I have to analyze them where the problems were from this weekend.
First bid on 1st Nov, Monday
One short contract for corn, soybeans and wheat respectively
There were several reasons that I predicted all three commodities’ price would be a downward trend. First, bigger crops in Ukraine and the European Union are increasing competition for U.S. grain in export markets. Second the US dollar will spike because of Japanese intervention in currency exchange market by buying US dollars, so, to a great extent, the prices of three commodities would decrease. Also, Ukraine had harvested 68 percent of its planted corn last week, reaping 14.1 million metric tons, more than all of last year’s harvest, so the excess supply should also drive the corn price down. However, just the soybeans price went down from 1207.4 to 1192.2, in turn, the corn price rose from 647 to 654.2 with relatively stable wheat price.
Second bid on 2nd Nov, Tuesday
Two long contract for corn (not enter to the market)
The reason why I was going long was due to the strong demand from China.
Third bid on 3rd Nov, Wednesday
One short contract for both soybeans and wheat
For soybeans
I thought the strong US dollar would be still the big factor affecting the soybeans price since soybeans futures were down for several days because of continuously Japanese intervention. It means that stronger US dollar will reduce the appeal of US crops to overseas buyers and make commodities less attractive as an alternative investment; therefore, the grain futures were still bearish.
For wheat
Since the market of wheat was pressured by the forecasts of crop-friendly weather for the US hard red winter wheat area, the potential increased production would drive the wheat price down.
This week it seems to be depressing as losing a lot of money. Hopefully, based on organizing my strategies well, I could make a good performance on the game.
I actually had the exact opposite strategy as you. I predicted all the three commodities bullish. The market this week rose a little bit but not that much. I think the market is in an upward trend although it is fluctuating. Thx for sharing Deron!
Same as Yiyi, I am also quite optimistic on corn prices. Soybean…ummm…seems no much news about demand of soybean, but I know the yield and storage of soybean all decreased. And actually many farmers shifted to plant more corn……and demand of corn is actually largened…..I’m not quite sure if wheat would rally…still looking close to wheat and soybean for more details.
And……..US dollar…….I think the factor most matters is the ECB cuts the interest rate….that’s quite competitive……..and it helps euro farmers…that’s pretty considerable.
Hi Deron, seems most of your strategy works really well and your prediction was right. You should tell us earlier then I won’t loss this much money…cuz i trust Tasha about the corn’s trend.
Hope you can do as better as this week in the next. And pls tell us more about your trading strategy to prevent my lost.