What Went Right and Wrong
This week I sell two contracts of corn and soybean. I haven’t offset both contracts until now. Generally, I did not lose too much. But this week the soybean future market is not easy to predict. It fluctuates a lot this week, while the corn increases steadily.
Corn
Oct 6
|
price in |
753.25 |
|
today’s price |
$757.00 |
|
committed |
$1080.00 |
|
gain/loss |
$262.50 |
Oct 4
|
price in |
753.25 |
|
today’s price |
$757.00 |
|
committed |
$1080.00 |
|
gain/loss |
$-187.50 |
Soybean
Oct 6
|
price in |
1540.00 |
|
today’s price |
$1551.50 |
|
committed |
$2700.00 |
|
gain/loss |
$-575.00 |
Oct 4
|
price in |
1540.00 |
|
today’s price |
$1531.75 |
|
committed |
$2700.00 |
|
gain/loss |
$412.50 |
There is something right to help me not lose too much.
I continue selling two different products to spread risk. Obviously, the lose of corn can be compensated partly by the gain of soybean. The corn market is predicted to decrease due to rapid harvest, while soybean is expected to decrease due to revising of soybean production by Ministry of Agriculture last week. 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.
However, there is something wrong resulting in slow increase of value and even a little lose.
Firstly, As we all know, information contributes to the price change. It is not easy to change the fluctuation unless the incentive happens. I missed the good opportunity in Oct 4th to offset the contract, when the price increases at the peak. Because the increase is not too much cam pared to the last two weeks, I thought it would continue felling. I ignored to renew my information of future market every day , consequently, I have the wrong understanding of whole market tendency.
Chicago Board of Trade (CBOT) corn futures fell on Friday due to the seasonal harvest pressure and some non-governmental organizations’ higher expectation aboutU.S.corn production this year than the government estimated. This year’sU.S.corn production is expected to be close to 112 billion bushels, higher than the 10.727 billion bushels projected in September by the U.S. Department of Agriculture, increasing the corn market pressure.
In addition, some traders expected the corn in the next week harvest would have a stable progress. Weak export demand signals made many investors chose to take profits before the crop supply and demand report annunciation of the Ministry of Agriculture next week, corn prices also was suppressed.