The first days of the last week I gain small amounts due to my short contract on corn. I was thinking to go short on more of the same contracts for a significant profit, but in the meantime I was fearful of what a disaster would be if the price will raise. My fear became reality on the memorable October 11, when USDA report dragged up the price of corn. As a result, the balance of the day marked a loss of $1262.50 and margin call equal with the loss.
I was planning since last week to secure (as much as this is possible) the short contract with a long one. I finally did it on Friday when price for corn start to move down, so the losses after the short contract were not so dramatic anymore. I am looking forward to see how the spread is going to save me from huge losses.
My equity balance on Oct.12 was $45821.28, less than it was at the end of last week. It would be nice to start gaining again, but this futures market is so hard to predict, especially when it makes strange movements in price after a USDA report is released.
http://www.usda.gov/oce/commodity/wasde/latest.pdf
http://www.farmfutures.com/mdfm/Faress1/author/252/2012/10/WCR101212.pdf
Hi Mihaela! You have an impressive equity balance. It’s sad to know that you could not win big this week. But, no worries we have a number of weeks left to make up for out losses. As for your trades, I used the same strategy in the beginning of the week by going short on soybeans and was hopeful of some profits. I guess you could have saved a lot of money by pulling out of these contracts before the release of the report. Anyways, as you might have already understood, the USDA report predicted a very low harvest quantity for the year that eventually led to a huge surge in prices. As for your opinion on the unpredictability of the reports, I agree with you on this fully. It is a tough job to predict how the markets will respond to some of the factors, such as the crop report. However, what I found informative and helpful this week were a few analyst reports, which I referenced before making a second trade on the day of the USDA report release. The analyst reports quite accurately predicted how the markets would behave. So, you may want to consult those if you wish – they are on my blog site. I hope to hear more stories from you regarding your trading experience.
Hey Ahmed,
Thank you for your comment. I see that you are recommending me some analysts’ reports which predicted how the market will behave before the USDA report was released.
I am looking forward to read the reports and let you know how useful I found them.
Meanwhile, good luck with your mid-terms!
Mihaela
Thank you for posting even though you must have been busy with mid-terms. I like your cautious approach. Thanks.