In last week I was thinking that I would trade a short sell wheat contract in addition to one long (buy) March contract because of expectation of Russia’s constraint of export of wheat; however, I ended up with trading only soybeans. The reason for that is I wanted to learn more about soybean market and soybean as a commodity overall.

Open Contracts

However, I made mistake on not offsetting my long March contract.

What went right that I made spread on soybeans this week in Thursday because of its less riskiness. Putting spread on long position the gain was “1535” but the loss on short position was “-1200”. The equity balance was “$36911.78” at the end of this week in total; the gain and loss was “-3087.5”.

Overall, in this week the prices for soybean were down, except it was up in Tuesday because of chatter that China would buy soybeans that would increase demand; however, it is recovered from its early losses because the USDA announced a sale of 180 tmt of U.S. soybean to China for the 2012/2013 marketing year, Thursday China bought 110 tmt of U.S. soybeans. Furthermore, in light of the positive atmosphere in corn and wheat trading, soybeans are closed at a higher price.

In spite of a high close, according to USDA’s report, the soybeans forecast way better that it was in previous forecast that means it may continue its down pattern.

In last week I was hoping that China would increase its demand for soybeans that happened in this week. And, I am hoping for South America’s harvest that it may affect to soybean prices. Also, putting spread I will avoid risk, and in light of high prices after USDA’s report I want to offset my long position in market type.

References:

http://farmfutures.com/story.aspx/afternoon-recap-tom-leffler-0-30795

http://in.reuters.com/article/2012/09/25/markets-grains-idINL4E8KP4JC20120925

http://www.agrimoney.com/news/dryness-helps-us-harvest-but-a-risk-to-2013-crops–5026.html