Month: November 2012

Cool Source of Information The Road Ahead

Surprise in corn + MarketWatch easy-to-read charts

Post author By Annie
Post date November 19, 2012
No Comments on Surprise in corn + MarketWatch easy-to-read charts

Last week’s expected corn pattern didn’t go so well, but it did end the week on an unusual high, judging from the week’s prices.

corn screen shot — Source: http://www.marketwatch.com/investing/future/corn

So, even with all the news about corn shortages, I will try to capture some profits in the first couple of days this week.

However, looking at my semester’s trends, it does seem like my short wheat position is still a much better long-term option than the choppy history I’ve had in the corn markets.

Therefore, I’m going to stick with learning some more corn lessons in the last couple of weeks, and hopefully take home some profits from getting out of two of my wheat contracts before the week begins.

What Went Right/Wrong

Week in Review

This week I was reminded again why I didn’t like the unpredictability of the corn markets. After trying to capitalize last week on what I thought was a weekly trend with an early week fall in corn prices, the Tradesim delays struck me, and I ended up instead observing different sorts of weekly trends.

Instead of falling at the beginning of the week, corn rose as the week went on.

Wheat, on the other hand, refreshingly followed it’s slight downward trend, which was again reassuring after some recent choppiness.

Since we learned last week about moving averages, I thought I’d take a look at the moving average of my longest-held contract, which makes me worry a bit about how that recent massive fall in prices will be responded to, if at all.

Cool Source of Information

Cool information: for visual learners

Post author By Annie
Post date November 11, 2012
1 Comment on Cool information: for visual learners

That title may have been a tease, but I can get lost in maps for hours, so for any like-minded map lovers out there, the National Corn Growers Association is a surprisingly active website with news, information, and analysis of all sorts:

http://www.ncga.com/drought

Interestingly, their response to the USDA report’s corn harvest forecasts don’t mention the counteraction from Obama’s re-election and its results on ethanol production.

What Went Right/Wrong

Week in Review: Go Obama!

Post author By Annie
Post date November 11, 2012
No Comments on Week in Review: Go Obama!

Politics made things very confusing this week. After Obama’s election Tuesday, and the promise of continued “status quo,” markets fell across the board. However, fears of what Reuters calls an impending “fiscal cliff” also injected fear into the markets [1]. This confusion was felt in the corn market, where prices shot in many direction. I looked to forecasts for ethanol production, which Obama is expected to cut [2], meaning demand will decrease. Unfortunately, that explanation ran counter to the skyrocketing prices in both corn and wheat, so we must look instead to bad weather in the US, Canada, and other major producing markets for a possible explanation.

I remained unsatisfied. Therefore, I kept my position in wheat and instead tried to capitalize on the large jump by re-entering the corn market at what I hope is its peak. “Expectations for a boost to official estimates of the US harvest when the US Agriculture Department releases its monthly supply and demand forecast on Friday added to the bearish tone…” [3] This “bearish tone” was reflected in the USDA report and I see no reason to expect it will change much in the near future.

[1] http://www.reuters.com/article/2012/11/07/markets-global-idAFL5E8M73RX20121107

[2] http://www.bloomberg.com/news/2012-11-07/ethanol-going-ugly-turns-bush-plan-to-obama-test-energy-markets.html

[3] http://www.brecorder.com/markets/commodities/america/89177-soybeans-drop-pull-corn-lower-while-wheat-steadies-.html

The Road Ahead

The week ahead: Week 9

I’ve been watching a consistent holding of wheat futures for the past few weeks, and very nearly freaked out when the prices skyrocketed after the US election this past week. This made me question my usual Wednesday/Thursday routine, so I looked for weekly trends in my corn and wheat holdings. Observing the trends in my own holdings (in true business school market research style), it appears my intuition was true.

The Thursday peak is surprisingly consistent. But what is most alarming is the dramatic fall at the beginning of the week in corn prices, a trend that begs to be tested.