Hi everyone!  Three more cool sources for you:

1. Grainews http://www.grainews.ca/

You can tell from the name of the web that it’s an professional agriculture web. A lot of lastest information and comments on the agricultural commodities is avalible for you!

2. The Weather Channel http://www.weather.com/

With it, you won’t miss any potential investment chance coming from weather change.

3. Trading Charts http://futures.tradingcharts.com/

You must want to find reliable and professional database.Here it is! Intraday futures charts are updated continuously during trading hours and professional requirement can be guaranteed.

That’s it. Good luck!

Yesterday, I submitted 7 long corn orders.

I did this for 2 reasons. First, I firmly believe that the USDA report has put a floor on corn market for the next week, despite the embarrassed export sales^①. I don’t think demand could vanish in a short week. I see the export sales shrink as an temporary adjustment. Second, after the price dove on this Friday,the profit-taking time was supposed to be over.I’m looking forward to a technical bounce next week.

That is to say,I have deeply confidence on corn price.Even if the price might goes down for the first one or two days next week,there is no possibility to form a downward trend in corn.

As for soybeans,I don’t want to get involved next week,unless some important news shows up,because soybeans price is too volatile and there hasn’t much solid imformation to help make the judgement, I think.

So, strategy for next week:

1. Holding 7 long corn

2. If the price goes down in the first one or two days, go additional long contracts and wait till the bounce come

3.Keep an eye on soybeans

Reference:

①http://www.agrimoney.com/marketreport/evening-markets-embarrasing-export-data-sink-grain-prices–1830.html

I have to say that this week means a lot to me, for not only I’ve gained 11 grand dollars (60879.82 – 49385.55 =11494.27), but also I’ve learned so much new stuff from the trading game.

When it comes to my trading operation, one thing you should know is that I traded tons of contracts this week and harf of them are for experimental purpose,but still, based on my research on the market(Yes,most of them were short contracts). Through these experiments, I’ve found answers to many of my questions,like what time the exact trading hours are,how to operate limit and stop orders and what the volume and open interest and their functions are,etc.

So, what went right?

1. Prior to the release of USDA Wasde report

Just as I mentioned in the last week,I went short on everything. I pulled out of the market to take the profit on Wedensday because of worrying about the “surprise” that USDA might give.

2. On and after the day that USDA Wasde report released

I got up at 5:30 on Thursday morning to check the USDA report.

(1) Corn

It seemed that corn production and stock level had been lowered in the revised report^①. For traders, it’s obvious a bullish signal for corn price.

So I took 7 long positions on Dec.2012 corn(C2Z), which turned out to be a mistake,because my price-in was at the price spike. On Friday, corn price plummetted on traders’ locking-in profit and bad weekly sales accoding to USDA Weekly Export report^{②③ .} I lost a bunch of money and learned a lesson called The Importance of Timing.

To avoid further loss, I offset my 7 corn contracts on Friday(approxiamately $6000 lost).

(2) Soybeans

Soybeans’s production had been revised higher and the stock level also went up^①. I took the report very bearish for soybeans futures.

So I went 5 short on soybeans.

To my surprise, soybeans price jumped at the beginning on the release of the report, although finally went down on the same day and the next day.I interpreted the price dive on Friday as a late response to the bearish report plus pretty much the same reason as corn’s listed above. But why would the price surge first on Thursday? I talked to some of my classmates and were told that corn and soybeans prices usually moved together,in the same pattern,for corn and soybeans,to some degree,are subtitutes with each other. I found it sensible.

As what I did with corn,I retreated from soybeans market with around $6000 gain,which is just enough to cover the loss from corn. I feel like not a speculator,but a pathetic hedgher.

But I’m happy in general. Anyhow, I had some money in my pocket this week!

Reference:

①http://www.usda.gov/oce/commodity/wasde/latest.pdf

②http://www.cmegroup.com/education/market-commentary/ag/2012/10/us-corn_1245.html

③http://www.fas.usda.gov/export-sales/h401.htm

Hi! Dear classmates, I did find two new and great sources this week!

1. USDA Email Subscriptions

This is the coolest source this week I want you to know. After registration and subscription, you will realize how easy it is to get first-hand documents immediately after their release.

https://public.govdelivery.com/accounts/USDAOC/subscriber/new

2. Reuters

This is the world’s leading source of intelligent information for businesses and professionals.It combines industry expertise with innovative technology to deliver critical information.

http://ca.reuters.com/

Wish you all make a great deal this week!

Next week will definitely be an exciting week. Based on USDA schedule, Crop Progress Report will be released on Tuesday, Oct.9. On Thursday,Oct 11, there will be another three market “movers” released, including Crop Production Report, World Agricultural Supply and Demand Estimate Report and World Agricultural Production Report.^①

According to current news, most traders expect higher yields in corn and soybeans^②.However, it is said that USDA reports are famous for making surprise.So as I see it,the road ahead is still hard to  predict.

At the same time as I write my blog, I notice that the corn and soybeans futures are falling,expecially for soybeans,which means the higher-production expection and good news from Brazil have trumped the news about the reduction in Canadian canola oil^③④.And now that the price fall appears after the weekend-market-close, I’d like to take it as the result of rational behaviors. Moreover, from the pyschology side, although the final estimate is still unknown, if traders want to make big money,they have to get some positions before reports released. Thus, I am sure that most speculators who are waiting for the USDA reports have already selected and took their final positions in short, which makes me believe that the downward price trend in corn and soybeans markets will not reverse before any release of the reports. Particularly, to soybeans,I can see from technical aspect that a downward space still exists, for Mar.2013 soybean(S3H) price was once well below 1500 last week already. So there will be no technical barrier against S3H to go down below 1500 again.

Hence,I’ll take following steps:

1.Take 3 short positions in Mar.2013 soybeans(S3H).

2.Keep holding 3 shorts on Dec.2012 corn(C2Z)

Of course, I will keep an eye on the market dynamics.

 Reference:

①http://www.usda.gov/wps/portal/usda/usdahome?navid=AGENCY_REPORTS

②http://www.agrimoney.com/news/corn-soy-prices-retreat-on-informa-crop-revisions–5073.html

③http://www.agrimoney.com/news/transport-woes-cloud-rosy-outlook-for-brazil-soy–

④5069.htmlhttp://www.agweb.com/article/canada_canola_output_down_sharply/

This week, I made several movements on my futures. Instead of submitting orders on the weekend and then tossing this trading game thing aside for the whole week, I operated frequently, which brought me obvious benefits. Yes, I got extra ten grand in my account. My current equity is $49385.55. Things below are what I have done:

09/30/2012 Movements:

a. Went 5 shorts on Dec.2012 corn(C2Z)

b. Holding 1 short on Mar.2013 soybeans(S3H)

c. Went another 4 shorts on Mar.2013 soybeans(S3H)

10/02/2012 Movements:

a. Offset 5 shorts Dec.2012 corn(C2Z)

(Price in: 757.00 ; Price out: 753.25)

b. Went 3 shorts on Dec.2012 corn(C2Z)

(Price in: 753.25)

c. Offset 5 shorts on Mar.2013 soybeans(S3H)

(One contract: Price in: 1572.25; Price out: 1501.75;

The other four: Price in: 1529.50; Price out: 1501.75)

d. Went 3 longs on Mar.2013 soybeans(S3H)

10/03/2012 Movements:

Offset 3 longs on Mar.2013 soybeans(S3H)

(Price in:1501.75; Price out: 1501.50)

So, up to now, what I still hold are 3 short Dec.2012 corn(C2Z). Reasons for making each movement above are given below:

1. Reasons for Sep.30 movements:   

Reasons were listed in “Week2 The Road Ahead” last week. An additional one that strenghened my confidence is that “the USDA on last Friday said domestic soybeans inventories as of Sept. 1 were 169 million bushels, above the average analyst prediction of 132 million bushels.”^①

2. Reasons for Oct.02 ,03 movements:

For Corn:

Because there was just a slightly decrease in corn on  Oct.02 ,I started to reconsider my strategy. Besides, I saw news saying“the surprisingly low level of old crop stocks should be enough to bring the recent price slide to a halt.” ^② So for caution, I chose to offset my previous short corn. But since there was no other sources providing bearish news for corn, I believed that downward trend in corn still existed.So I went 3 shorts on corn(C2Z) in the same day,hoping the price would fall on Oct.04(Transctions have one day delay on TradeSim)

For Soybeans:

The only reason for me to change soybeans from short to long is that Mar.2013 soybeans hit three-month-closing-low on Oct.02,digging 1501.75^①,which I thought would be the turning point for soybeans to bounce back, for the technical consideration. However,soybeans kept going down on next day.And that was the reason why I chose to offset my long soybeans on Oct.03.But the latter few days did witnessed the bounce.

 3. Reasons for holding 3 shorts on corn(C2Z):

As I have mentioned, I expected a lower price in corn. And there it was! Oct.02 news showed that “54% of the U.S. corn crop has been harvested, according to USDA’s latest crop progress and condition ratings. And the five-year average for this time of year is 20%” ^③.Later, as we can see from the data last week, despite the affection of the weaker US dollar, the corn price still went down on last Friday. I interpreted this as a signal of a higher yield expectation in corn. So I haven’t offset corn.

Reference:

①/http://futures.tradingcharts.com/news/futures/DJ_U_S__GRAIN_AND_SOY_REVIEW__Soybeans_Fall_on_Better_Yield_Views_186585928.html

②http://www.agweb.com/article/grain_stocks_provide_surprises_but_less_information_than_usual/

③http://www.agweb.com/article/corn_54_harvested_soybeans_41/

Hi,dear classmates! I’ve got three more webs for you!

1.CME Group.http://www.cmegroup.com/

The biggest advantage I found about this web is that you can have up-to-date data of any commodity you want.You can also easily convert data into various charts on it, so that you get a more clear view of what happened.

2.USDA Official Website. http://www.usda.gov/wps/portal/usda/usdahome

Nothing is more valuable than first-hand documents. From here, you can get details in dynamics of US commodities though USDA official reports,which are all big “movers” in the commodity futures market!

3.Live Trading News

http://www.livetradingnews.com/category/comodities/agriculture/soybeans

One thing you will benefit from this web is that it is good at giving you the outlook of the whole current commodity market, which is very important when doing correlation analysis.

Good Luck!

Well,since the USDA stock report had been released this week,there will not be another “bomb” from USDA next week. So, technically,the commodity futures market next week should be less volatile.

My intuition tells me the downward market trend will continue, because the low stock level not only reflects the current high demand but also indicates that stockholders lack confidence in next-year’s price .Besides,I don’t believe traders’ previous expectation will switch such easily in such a short time zone. Aslo,I expect good news from Latin America. So, my conclusion is that the prices of Corn and Soybeans will go down in general before any new USDA report is released.

Based on my analysis,I’ll take steps below:

1. Keep holding short on Mar.2013 Soybeans(S3H).

2.Take another four short positions on Mar.2013 Soybeans(S3H)

3. Take five short positions on Dec.2012 Corn(C2Z)

I am looking forward to sitting on the top of the hill stacked by money!

1. Result

(1) I got a realized loss of $1363.50 by offseting the Dec. Corn(C2Z).(Price in:768.25;Price out:741.00;)

(2) I gained $400 this week by taking one short on Soybeans.(price in:1572.25;last trading day’s price:1564.25)

Final Equity last week:$39000.50;  Final Equity this week: $39036.80

Final gains this week:$36.30

2.What Went Right

(1)Went short to offset Dec. Corn(C2Z)–Right

I went short to offset my contract immediately after C2Z price decreased from 748.25 to 744.75 on Thuesday,which proves a very smart move,for the next few days experieced a dramatic fall in C2Z price,digging at 705.00.

The main reason for this drastic drop may be the announcement of  underestimate of corn production addressed by USDA previously.

But the C2Z price bounced on Friday, locking up the limit up at 756.20,which was caused by a new release of the USDA crop stock report on Friday. It seemed like traders had overestimated the stock level.So the corn price soared on Friday.

(2) Went a short on Mar.2013 Soybeans(S3H) –Right

I did this for the same reason as I shorted on Corn.I anticipated a downward trend for Soybeans due to the USDA annoucement of underestimated production. And there it went. The price were down to 1524 on Thurday.While on Friday,because of the surprising stock report,it turned back to 1564.

3. Brief Comment

To sum up, I’m basically satisfied with the trading result this week.There is no doubt that USDA’s stock report caught most traders,including me,off guard .But,after all,that’s something for which you should not blame yourself.

References

http://www.agweb.com/article/stocks_report_delivers_september_surprise/

http://www.cmegroup.com/trading/agricultural/grain-and-oilseed/corn.html

http://usda.mannlib.cornell.edu/MannUsda/viewDocumentInfo.do?documentID=1079

I recommend Three websites for all of you.

1. http://www.agweb.com/

This is a website powered by Farm Journal. A variety of daily agricultural news are posted on it. The best thing of this web ,I think, is you can find news of a certain commodity under its own catagory. After you choose a certain commodity, the web system will filter off news and comments of other commodities,solely showing you the information you want to see.

2. http://www.library.ubc.ca/

This website belongs to UBC library. The unique advantage of it is that you can find almost any theories and principles of Futures on it in details by just enter the key words and then click “search”.Many books are open to online reading!

3. http://online.recoveryversion.org/index1.asp

Yes,it’s the Bible online-reading. A Christian recomended me the web, saying this version had a lot of footnotes that can help me understand some of the bible. I haven’t read it yet, but I definitely will.

I’ve hold an opinion for a long time:  Most of the time(like when you are in Futures or Stock market), being honest and refraining yourself is much more important than being too confident and trying to control the whole situation based on the limited information you have. Afterall,what you know is far less than what you don’t know. So, being humble and relax,let God works in his mysterious way.