Last week of trading..!! Oh boy, am I going to miss it. So, like as we have been suggested, I am going to place a greater emphasis on my thoughts and reflections over these past weeks rather than a long discussion on tecnhical stuff. 

Quick Recap –  1 short, 2 short and 6 short open contracts for corn, soybeans and wheat, respectively at the end of last week, with a margin balance of 82950.

Monday Nov 14th — My strategy this week was to prepare for offsetting. This seemed to work well with the research I analyzed on Sunday, as prices of corn should go up (but maybe not a huge rally) because of a huge demand for corn from the US. This would likely cause a surge in the corn price, but may not sustained at that high level due to Euro debt crisis. However, I planned to take advantage of that forecasted price surge, so I decided to offset my short positions and take 5 long positions in corn.
Soybeans and wheat: Harvest is positive and there is increase in production as well as decrease in demand, so prices should go down. However, I want to prepare for offsetting soon, so I decided to take 5 long positions to start offsetting my contracts.

Profit at end of day: 80650 (I lost about 2000 because prices were decreasing, but I felt it was worth to bid for long because I cannot hold anymore short contracts, otherwise I would be unable to offset in time when the game ends!)

Nov 15th — the market continued to look very bearish for all commodities. Once again, there was reoccuring worries of the debt in Europe and all the political issues are stirring up fear among investors. It seems like this is overpowering and offsetting the other factors, so I took 5, -2, 5 for corn, soybeans, wheat respectively. Soybeans, I decided to take long because I didn`t successfully offset yesterday. The other 2 commodities, I can take advantage of the bearish outlook on prices for another day and then offset them right before the game ends!
End of day profit: 78680

Wed 16th — I made a careless mistake (found out on Thursday)! Not because of my strategy, but because the excel file went haywired! I saw that none of my bids yesterday got through, so I was still holding the same contracts before I placed my bids yesterday. However, I don`t want to offset yet because the game has not ended, and prices are dropping quite dramatically right now because of the main influence by the Euro crisis. So I bid 3, 5, 3 short contracts for the commodities of corn, soybeans and wheat since I don`t want to get out from the market just yet, and can still make some profit because I am confident that the Euro crisis will have a large impact to continue in putting a downward pressure on the prices. End of day profit = 87200

Thurs (17th) — Today, I saw I am suddenly holding 4,2 and 9 short positions. I was so confused because even if my bids yesterday were successful, I would be in no possible way to have this many contracts. So I spent a lot of time figuring what happened or if I entered the wrong thing into my bids. However, I couldn`t find anything and I was wondering how I can offset now ….especially with 9 open contracts in wheat! It didn`t make sense that I was even able to have 9 contracts when we could only bid for 5 each time, and yesterday I just bade 3 after offsetting..so where did the extra 6 come from?
So I went and calculated all my positions and prices from previous days to see what suddenly happened. Then I realized my excel file is updated now showing that I was already holding short contracts before I had bid yesterday. It all made sense to me now..!! I didn’t realize that the prices were not updated yesterday and thought my bids didn’t got in successfully, leading me to thus bid as if I was just starting anew. However, the prices got updated sometime in between, and all my bids were successful. So…all these open contracts accumulated from my bids yesterday when I thought they were unsuccessful.
The sad thing is when I found out, it was already past the time allowed for bidding — thus, I cannot offset my open positions anymore! End of day proft = 105, 670 

I have to buy goods in the cash markets right now (thank goodness they are still decreasing at low prices!!) and then turn around to deliver! End of game profit= 103,900
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All in all, I really enjoyed this trading game! It was something that we all knew of its existence, but had not one single clue of how and where to start participating in it! Over these weeks, I realize that strategies in the game are not like one size fits all — even though we are all playing the same game for the same stuff, we need to apply the strategy that feels the most comfortable in fitting our game style.

Over the first month, I basically tried to explore different strategies and find one that is not only the most logical, but most importantly, that works for me most efficiently. I realize that to be able to keep up wth the dynamic market, it’s not like homework where we complete it and can close our books. You really have to dedicate a lot of time and effort into keeping up with news that may affect the market. Over the weeks, you sort of know what news are more crucial to look out for in your strategy, so it becomes more efficient as you build up your skills. However, your strategy is not fixated…..at times, you need to adjust and fine-tune your stategy to fit the current trend, so staying updated is very important. If it was bidding for real, I would not take a break over mid-term week from the game, because we always have to be on our toes to increase our chances of making profit.

So I also learned that in the real thing, there should be no breaks- you should eat, sleep and breathe trading news, trading strategies…to make sure you can do the best (with a lil luck needed too).

Last but not least, big thank you to Andrew for guiding us through the game and Javier for monitoring and updating prices!! I will miss the game and all the blogging, tweeting that came along with it!!

Next week will be our last week of trading! Oh….how I wish those 82,950 profits can be turned into real money!! hahahah…guess I should turn back to reality *sighh*
anyway…here we go:

Quick Recap — Right now I am holding 6 short contract for corn, 5 short positions for soybeans, and 6 short positions for wheat. Marginal balance at 65430.
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Nov. 8th Tues
The US dollar is facing upward pressure from a boost due to the outcome of a key budget vote in Italian parliament (http://www.proactiveinvestors.com.hk/market_news/4374-gold-holds-steady-at-1-795-as-us-dollar-climbs.html). However, the corn harvest this year is the lowest in these past 3 years, and soybeans are also continuing to decrease in annual yield over the past 3 years (http://www.mitchellrepublic.com/event/article/id/58750 ). Thus, I predict that the prices of commodities would probably increase for a bit due to the shortage in supply, but would decrease as the Euro debt crisis is having a significant impact on the US dollar. Furthermore, the supply of wheat is abundant as this year has the largest reserves in a decade of wheat production (af.reuters.com/article/commoditiesNews/idAFL4E7M90BV20111109). So, I predict the wheat should decrease, but because corn and wheat are substitutable, wheat price might be pushed up if corn price is actually going to increase, which turns investors to wheat instead. So I decided to bid for 5 long positions and 3 long positions for corn and soybeans, respectively. Margin balance was 73190

Wed. Nov 9th
Today, I read news that the production of soybean, wheat and corn are actually not as bad as yesterday’s reports. In fact, prices have decreased for all the commodities. EU debt crisis is having a large impact on the US dollar, causing it to continue appreciate http://www.torfx.com/blog/the-pound-was-generally-weaker-against-the-us-dollar-exchange-rate-following-the-u-s-non-farm-payrolls-report/10801/. However, my strategy in thinking about this decrease in commodity prices could be because wheat had large reserves when corn supply is lowest in 3 years. So, upon knowing that, investors are substituting corn with wheat instead, and thus causing the corn price to decrease as well.  I decided to offset the long contracts that I bade for yesterday, by taking 3 short positions each for corn and soybeans. Margin balance was 82380 at the end of the day.

Thurs Nov 10th
Today I read that there is huge panic about the massive debt in Italy, which is worsening the Euro crisis, along with the political issues between Italy and Greek. Also, even the European Union has warned that next year they may slip into “a deep and prolonged recession”. This caused the US dollar to rally sharply and regained its ground as investors are turning to the safe-haven once again. Thus, I am expecting the prices of commodities to be bearish because of this significant impact of the Euro crisis. Since my bids were unsuccessful yesterday, I am going to attempt for 4 short positions in corn, 3 short for soybeans, and 1 short contract for wheat.
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Currently, I am holding 1,2,6 short positions for corn, soybeans and wheat, respectively. My margin balance is 82,950. For this last week, I plan to continue bidding for a few more short contracts for corn and soybeans since my bids the previous 2 days were all unsuccessful (predicted a higher price), should I expect the commodities to be bearish.

Recap of last week’s holdings
I was holding 2 short contracts for corn, 2 short contracts and 1 short contract for soybeans and wheat, respectively.
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Tues, Nov. 1st
Since Japan has announced that they plan to buy US dollars to curb the its Yen appreciation, there will then be a limited supply of US dollars leading to appreciation and thus lowering prices of commodities. This downward pressure on prices of commodities would hold for as long as Japan continues to intervene in this manner (http://www.dailymarkets.com/forex/2011/10/31/crude-oil-futures-drop-as-u-s-dollar-rallies-on-japan-move). I predicted that the prices of commodities would continue to look bearish, with further support from news that European Debt concerns are resurfacing again, which is encouraging investors to turn back to the “safe haven” – US dollar (http://toronto.ctv.ca/servlet/an/local/CTVNews/20111031/tsx-stocks-eurozone-deal-fears-111031/20111031/?hub=TorontoNewHome). I bid for 3, 3, and 1 short contracts for corn, soybeans and wheat, respectively.If I were successful, then my open short positions would be 5 contracts in all 3 commodities, which allows me to easily offset should I need to. My margin balance at end of day was 75,800.

Wed., Nov. 2nd
In Jim’s class, we learned that there are correlations in crop prices due to substitution. So, this means there is a fixed amount of land used for planting the 3 different crops. For example, If more land is used for soybean, less land would then be available for growing corn. Thus less corn would be supplied and its price would increase. However, this is not taking other external factors into account. The price could increase a lot due to unfavourable weather, demand increase and such, or it could decrease due to a huge drop in demand for the crop. So, we really need to take into account many factors, but this does give us an expectation and idea into how these prices would change depending on how substitutable the commodities are.

Global economic uncertainties remain from Europe’s debt crisis, so the US dollar is continuing to appreciate because investors are still favouring the relative safety of the US dollar. So the commodities would most likely still be following a bearish trend in the short-run. Also, in terms of weather news, heavy rainfalls have also boosted the harvest of soybeans, and it would likely continue to decrease as well. So it seems reasonable for me to take short positions, however, as I am already holding short positions for all 3 commodities now, I will only bid for 1 more short contract for each commodity, as I don’t want to hold too many should anything changes that will turn the prices from bearish to bullish. My margin balance at the end of the day was 80,580.

I also read the news that Argentina’s soybean processing workers are on strike and export loading has been disrupted. So, this mean the supply of soybeans would decrease and prices would be expected to increase. However, I believe coupled with US dollar appreciation, the increase in price would not have such significant effect. I decided to hold onto my short contracts and wait for more research information before I offset too quickly.
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My current margin balance is 68,690. RIght now, I am holding 6,7 and 6 open short contracts across the 3 commodities for corn, soybeans and wheat, respectively. For the upcoming trading week, I plan to start offsetting some short contracts or continue holding the same amount of short contracts, but won’t bid for more as I feel that I would lose control if I bid more even if prices continue to decrease.