What Went Right and Wrong
What Went Right and Wrong
This week I sell two contracts of corn and soybean. I offset both contract in Friday. Now I have no future. Generally, I gain not too much. But this week the whole future market is not easy to predict. It fluctuate a lot this week.
There is something right to help me keep gaining.
Firstly, I sold two different products to spread risk. To put all money on one product is risky. Before I invested in the future market, I analysis the graphs of price fluctuation and reports, they have had different tendency. As we all know, information contributes to the price change. It is not easy to change the fluctuation unless the incentive happens.
Secondly, recently, CBOT soybeans market showed a relatively weak state. After theUnited Statesdetermines to cut the harvest, the market has been the lack of fresh information guidelines. And it is now in the soybean harvest season, the market worried about the influence ofU.S.harvest cut-down will not work as expected. Weather is good for planting of the crop-producing areas inSouth America. According to soybean weekly export in recent weeks, in theUnited States, the data of inspection and squeezing relatively low, show a slight weak signal. However, with rains in August and September, the corn yield is gradually stabilizing. Since this year’sU.S.corn planting earlier, the current harvest rate of 26%, while 8% in the same period last year and the 9% of five-year average.26% has hit a record level in nearly two years. Therefore, good market supply accelerated the decline in corn prices.
However, there is something wrong resulting in slow increase of value.
I missed the good opportunity in Sep 27 to offset the contract. When the price sharply increases abnormally with no obviously reason, it will return to back finally. The hedger should take this risk.