Last week I search the Internet and get a news that the US Department of Agriculture is expected to say this year’s US corn harvest was the smallest in six years and that corn supplies could hit 17-year lows by the end of next summer due to crop losses from the worst drought in over 50 years. An average of analysts polled by Reuters indicated the USDA would peg 2012 US corn production at 10.601 billion bushels, below the USDA’s forecast in September for 10.727 billion. The analyst average pegged 2012/13 US ending stocks at 648 million bushels, below the USDA’s September forecast for 733 million and global corn ending stocks for 2012/13 at 121.322 million tonnes, below the September outlook for 123.950 million. Light showers on Tuesday will cause minor slowdowns in harvesting the US corn and soybean crops while heavier rainfall by the weekend is seen stalling harvest. From this news, I think it means that the corn supply is less this year and demand is bigger than the supply, then I expect that the corn price will be increase. So, I choose 2 corn contracts on October 10th and offset on October 11th and I earn $1461.5*2=$2923.
In addition, I also choose 2 soybean contracts (short position) on October10th and offset on October 11th, because the USDA’s monthly report was expected to forecast the US soybean crop at 2.759 billion bushels, based on the average of estimates in a Reuters survey of 26 analysts. The average yield was seen at 37.006 bushels per acre, up 4.8 percent from a month ago, also have the last round harvest, from these information, I think soybean price will be continue decrease. Unfortunately, in the end I lost $876*2=$1752.
Date in Date out Contract Position Quantity Price in price out Gain/loss
10-10-2012 11-10-2012 C2Z long 2 741.25 770.5 1461.5*2=2923
10-10-2012 11-10-2012 S2X Short 2 1537 1554.5 -876*2= -1752
This week I choose 2 long soybean contracts, I find soybean monthly price from March to September in CME group website, I find that from March to June, the soybean price is decreasing because of supply increase, but from September, the price is reduce. In my point, September is a harvest month, and now harvest should be almost over, part of the soybean will be stored. In this case, soybean prices will be rise.
I am exciting that I gain $3148 this week, although is virtual trading.
Date in Date out Contract Position Quantity Price in price out Gain/loss
16-10-2012 19-10-2012 S2X long 2 1510 1541.5 1574*2=3148
Reference：
http://www.cmegroup.com/popup/mdq2.html?code=ZSX2&title=November_2012_Soybean&type=p#period=W;bartype=LINE
http://www.brecorder.com/markets/commodities/america/85465-cbot-soybeans-rise-on-tight-us-stocks-despite-larger-crop-.html