After a long flagging period in last week,  I made a big turn over this week——a profit of $3511. I changed my strategy this time and kept eyes on the fundamental plane more often. I made 4 movements in 3 days, and I think it was the accurate forecast and timely action helped me success this time.

Now, my current equity is  $30667.26. My movement are as following:

1. 10/17/2012 Movement:

Went 1 long on Nov. (S2X)

(Price in: $1498)

2.10/19/2012 Movement：

Offset 1 long on Nov. (S2X)

(Price in: $1498, Price out: $1541.5)

3. 10/19/2012 Movement：

Went 1 short on Nov. (S2X)

(Price in: $1541.5, Today’s Price: $1534.25)

4. 19/10/2012 Movement:

Held 1 short on wheat (W4K)

(Price in: $860.25, Today’s Price: $840.75)

Reason for the first movement:

Demand! Demand!

1. As USDA’s report (10/16/12012) said “The October soybean forecast, at 2.86 billion bushels was about 90 million bushels larger than the average trade guess and 126 million larger than the September forecast.” (http://www.agweb.com/article/analyzing_the_october_corn_soybeans_production_forecasts/ ) After reading this news, I interpreted there will be an increase as a reflection of stronger demand than had been previously forecast.

2. “After doing a research of the rate of soybeans’ storage and usage, Kluis(Agriculture.com Market Analyst) says ‘At the current pace of bean usage, the market’s response is that we are not going to have enough crop on soybeans. If we continue using soybeans at this pace, we will either have to shut down plants or import beans from South America.’”( http://www.agriculture.com/news/crops/farmers-alysts-still-bullish-cn-soybes_2-ar26920Farmers)

The following picture shows the expectation of speculator:

( http://www.agriculture.com/news/crops/farmers-alysts-still-bullish-cn-soybes_2-ar26920Farmers )

Reason for the second and third movement:

Psychology cycle !

The world’s demand towards soybean, added with the commercial speculation of the South American weather had already driven the price of S2X rise fast for 2 days. The only reason I offset the long contract and turned to the short is that I think the price($1541.5) is high enough. That is the time for those speculator to back out. Later, the market proved that I was right.

Reason for the forth movement:

The reason for this movement has already been announced in the last blog. “From the USDA’s report, there is a signal of higher yield of both corn and wheat”. This time, I made a decision to hold this contract for a long period. Because after analysing historical wheat trade data, I  found the price will land smoothly. So that means, after experiencing a sharply increase (because of the heavy drought) , the price of wheat must face a gradually decrease.