Week 1 gave me a crash course in futures trading and the tuition was not cheap ($9174). I was kind of discouraged and decided to stay out of the markets for a couple of days. So I continued to hold my corn and soybean from last week (both losing money) without making any transactions until halfway through the week. On Wednesday night, I surprisingly found that there was a sudden jump of commodity prices during the day. I thought there might be a chance for me to get my money back, so I decided to get back in action.
After doing some research, I found that this is all because of something really good happened to wheat, and it consequently leads to an upswing of the whole grain market. The China National Grain and Oils Information Center said in a report that China is likely to import 7.5 MMT of wheat in 2013/14. If realized, it would be the most imports since 1995/96. USDA currently forecasts China’s imports at 9.5 MMT. Wheat futures for delivery in December jumped 1.9 percent to close at $6.705 a bushel at 11:15 a.m. on the Chicago Board of Trade, a four-week high. In addition, the production concerns in Argentina and improved prospects for U.S. exports also contributed to this increase. A frost early in the week could harm Argentina’s wheat crop and reduce the world’s exportable supply.
Although surging wheat prices boosted corn futures, corn also has some good news about itself. In the latest “U.S. Export Sales” report, the USDA shows corn climbing for its third consecutive week to 640,100 metric tons (MT) for 2013/2014, up 46 percent from last week.
So, I bought more corn at $4.55 per bushel on Wednesday night. At the same time, I put a limit sell order at $4.80 to sell all my corns. The corn price fluctuated a lot during the next 2 days (as low as $4.51) and finally got to $4.59 for a brief moment this morning. I think this is my biggest success this week which brought my portfolio % return from -14.42% back to -3.92%. Here is my trade and portfolio summary for this week:
I have learned two lessons this week:
- Don’t just read North America news, international news also play an important role in predicting the market’s movement.
- I got this one from Mark: Macro is really tough to call, so when lots of macro events are happening, just stay out of the markets. If you manage to keep your wits (don’t be emotional), you will see great opportunity.
I will keep an eye on the release of the USDA’s next Grain Stocks reports on Monday, September 30th. This will definitely cause another round of predictions, fluctuations, frustrations, and etc.
Here is a new website I found this week, hope it’s useful: http://agfax.com/
Looking forward to round 3.
Actually you said “Something really good happened on wheat” means a true nightmare for me… anyway,I ctrl+d that news website and hope that will really help for my researches…. Thanks Mike !
One man’s meat is another man’s poison… I was in about the same position as you last week (my % return is still negative even now). Macro events and weather are really tough to call, so don’t get discouraged. I hope that you can utilize the upcoming USDA crop report and recover soon. Cheer up, Alex!