Right when I thought I had these general trends under control – Surprise! All of our trading commodities suddenly hit bottom and rose last week, catching me completely unawares. I shouldn’t have been surprised, frankly, but it did cause me to panic a bit and get out of my short contracts quickly. This means I’m now only trading in wheat, which is less interesting but, since I’ve discovered I’m not a good day trader, is probably a better idea. I ended the week down $4,328.33 from the end of last week ($39,50,29 to $35,178.96), but more importantly, down $7,865.87 from my Monday ending balance of $43,044.83.<\/p>\n
I am uncertain whether I should have kept my medium to long-term strategy that led me to enter those short corn contracts in the first place. Looking at longer term trends in the corn markets means I am looking at entering a spread this week, but that’s a subject for the next post.<\/p>\n
Why did the prices rise, and why should I not have been surprised? As I said last week, I was looking at the Australian wheat harvest this week, and I anticipated a drop in prices because of an increase in supply. However, I failed to remember that it is the\u00a0size of the harvest relative to expectations that is key, not today\u2019s greater supply of wheat as compared with \u201cyesterday\u2019s.\u201d So I went short on Tuesday when I should have gone long, and got out of it on Friday.<\/p>\n
By early last week, predictions had come true, and prices had gone up. In a hasty move, because I didn\u2019t have time to read up on the news, I noticed gathering disaster forming, and I got out of almost all of my contracts without entering the market any other ways.\u00a0 I think I cut my losses, but it does mean I lost consistency with my longer-term strategy.<\/p>\n
According to Bloomberg, \u201cWheat climbed 35 percent this year as dry weather in parts of the European Union and\u00a0Russia<\/a>cut global stockpiles to the lowest in four years, helping boost\u00a0food costs<\/a>\u00a07.7 percent the past three months. The\u00a0U.S. Department of Agriculture<\/a>\u00a0cut its estimate for Australian output 12 percent to 23 million tons on Oct. 11. That may be lowered a further 2 million tons in coming reports because of dry conditions, said Rabobank International.\u201d [1]<\/a> Right when I thought I had these general trends under control – Surprise! All of our trading commodities suddenly hit bottom and rose last week, catching me completely unawares. I shouldn’t have been surprised, frankly, but it did cause me to panic a bit and get out of my short contracts quickly. This means I’m […]<\/p>\n","protected":false},"author":8589,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[568639],"tags":[],"class_list":["post-56","post","type-post","status-publish","format-standard","hentry","category-what-went-rightwrong"],"_links":{"self":[{"href":"https:\/\/blogs.ubc.ca\/lambla\/wp-json\/wp\/v2\/posts\/56","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blogs.ubc.ca\/lambla\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.ubc.ca\/lambla\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.ubc.ca\/lambla\/wp-json\/wp\/v2\/users\/8589"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.ubc.ca\/lambla\/wp-json\/wp\/v2\/comments?post=56"}],"version-history":[{"count":1,"href":"https:\/\/blogs.ubc.ca\/lambla\/wp-json\/wp\/v2\/posts\/56\/revisions"}],"predecessor-version":[{"id":57,"href":"https:\/\/blogs.ubc.ca\/lambla\/wp-json\/wp\/v2\/posts\/56\/revisions\/57"}],"wp:attachment":[{"href":"https:\/\/blogs.ubc.ca\/lambla\/wp-json\/wp\/v2\/media?parent=56"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.ubc.ca\/lambla\/wp-json\/wp\/v2\/categories?post=56"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.ubc.ca\/lambla\/wp-json\/wp\/v2\/tags?post=56"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\n[1]\u00a0http:\/\/www.bloomberg.com\/news\/2012-10-22\/wheat-harvest-in-australia-seen-slumping-to-lowest-in-five-years.html<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"