1. Bide My Time to Offset Corn(C2Z)
In spite of losing $1000 this week for my long position on C2Z,I decide to keep holding it long next week. As I mentioned at the end of “What Went Wrong” post, I interpret the price turning around in the last few days of this week as a signal that the affection of drought on corn production hasn’t past and the demand from biofuels, livestock industries and other sources for corn still stays high.
Meanwhile,I noticed a piece of news from the website that Gulsana suggested saying that US farmers raised corn and soybean sowings even further than officials have revealed. According to the news, the influential analysis group pegged corn sowings for the ongoing harvest at 97.172m acres, up more than 750m acres on the current US Department of Agriculture estimate, which hits the 77-year top. So I hold the view that there might be more supply of corn than originally expected in the coming monthes.
Based on the analysis in two sides above,I’ll hold the long position and bide my time.Once the price goes down,I’ll offset this contrct immediately, otherwise, I’ll choose to keep holding it .
2. Take Short on Soybean
I made my decision to take short on soybean after I heard that dry conditions in Brazil’s soybean growing region are expected to allow planting there to progress at a rapid pace. News said that a total of 140 million tons of soybeans are expected to be produced in Brazil, which is a more than 30% increment from last year’s drought-ravaged crops. Accroding to the “First week up and down with Soybean futures – What Went Right?” post in Roson’s blog,I got the information that Brizil is one of the major soybean producers in the world(occupying 25% of world production) and soybeans in Brazil are planted in mid-August through mid-December and harvested during February to May. So I anticipate a huge tons of soybeans are on thier way of being planted.
In addition,the “US farmers raised sowings” news mentioned above makes me further believe that future supply of soybeans will soar, pushing me to set up my mind to take short on soybean.
Hope money rolls in!
References:
http://www.agweb.com/article/soybean_price_declines_could_continue_for_awhile/
https://blogs.ubc.ca/gulsana/2012/09/21/cool-source-of-information/
http://www.agrimoney.com/news/corn-sowings-to-hit-77-year-top-soybeans-a-record–5019.html