After two back to back weeks of substantial losses it feels good to come out positive at the end of the week. I started the week sitting long on four contracts of wheat taken the week before. Prices had fallen, but not to my exit price. I knew that with the crop report coming up prices could shift in any direction at any moment, so daily, as the price slow crept up, I set ever increasing stop loss orders in an attempt to minimize any sudden market shift. Fortunately on the day of the publication of the crop report prices surged and I was able to lock in a profit.

I was also short on corn this week. The speculators seemed to think the extent of the drought had been over exasperated. Whether it had or had not, it didn’t matter, the only thing that matters in the short term is the speculators expectations. So I went short up to the day before the crop report and then exited with a healthy gain. I got out before the report was published because I knew it was basically a coin flip as to whether the report would send prices up or cause them to fall. As the extent of my previous week’s losses had caused me to be a bit risk adverse, I figured I would lock in a sure thing instead of face another potentially bank breaking outcome. In the end I was able to walk away with secured profit.

Posted: 10|14|12 at 5:04 pm. Filed under: Uncategorized.
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