According to last week’s experience I make two decision:
1. Go on with the long contract of soybeans. On 28th September, I bought 5 contracts of soybeans (Nov 2012).
The first reason I do this is that the newest USDA report, which corrects the former output data of soybeans in America this year, says the actual statistic of this year’s supply of soybeans is lower than expected. I believe such news will shock the soybeans market for a few days.
The second reason is that in terms of the historical data, from September to October, the soybeans market fluctuates wildly. In the long run, after several rise and fall, the price will tend to be stable; while in the short run, we must analysis the psychology of both traders and farmers. As to the farmers, last week’s “big harvest” news decreased the price sharply. From that, I guess more farmers will wait to see the price rally up which means the supply will reduce again. So I think the price of the Nov. soybeans price will rise in the short term.
2. Last week we learned how to use the spreads of two periods’ contract to make arbitrage. So this week I also want to have a try on the spreads order.
