Weekly trading –

I started off thinking I needed to offset my 5 short contracts with Corn into a more conservative amount to 2 short contracts; therefore I would be offsetting 3 long contracts. I did this at a price of 651 this was an alright estimate as it was higher then the daily low. I looked at the range between low and high daily’s and it seemed to be getting more narrow hence my strategy to move 1% off the daily low. Overall for the week I made a good move by offsetting my short contracts at such a low price and I am now in a more stable position for next week. Corn this week only showed 1 read significant day where there was a minor drop in the price overall it finished at 651 a rather monotonous week for movement.

Soybeans I thought I would be moving down, I went short, and made some progress until the weeks end when the price rebounded back.

I made the same move for Wheat, short contracts this worked all week for me until the Friday rebound.

This week it looks as if the MACD lines will cross, this could issue a buying signal like in late August. The EU leaders met this week and have moved closer to securing a plan to help ease the European debt crisis, this Euro Deal could be encouraging news could have caused some positive re-enforcements in the market prices. I think I am starting to change my mind on the short contracts for the future… if speculators are taking more long contracts, this as we know will lower future prices and increase today prices. I am going to start off the week with a total over haul and move into long contacts for the next week for corn and wheat.

I still think that soybeans could drop lower in the market.

More to come

Currency Guru – Forex is the Golden Ticket.

This week I have moved away at my weak attempts to successfully day trade, instead I am working on a weekly strategy. At the start of the week I decided that I would make an overall move for the week, Short for all 3

Look at the Average Daily Trading as a Percentage of overall total.

This week closes.       Corn                            Soybean                     Wheat

Mon                            645                             1,235                          660.6

Tuesday                     640.6                          1,239.4                       626.6

Wed                            638.2                          1,257                          618

Thursday                   640                             1,270                          622.6

Exchange rates          USD/EURO                 USD/CDN

Monday                      .7474                          1.0392

Tuesday                     .7385                          1.0301

Wednesday                .7336                          1.0292

Thursday                   .7291                          1.0222

Friday                         .7265                          1.0202

GOLD

Monday                      1,672

Tuesday                     1,662

Wednesday                1,682

Thursday                   1,667

Friday                         1,681

I waited to see what the values were on Monday, then I looked at the Close for Tuesday. Half a percent down, half a percent up; wheat had a significant -6% decrease, this looked promising for a short contract for the rest of the week.

The Grain Commodities Overall for the week: down -1% for Corn, a minor +3% increase in Soybeans and a -5% decrease in Wheat.

I took an over aggressive -8% move on Tuesday for wheat, (closed 8% higher then my bid), this bid was far out. Wheat moved -6% from Monday to Tuesday so my bid of -5% was a pretty good, except the market had really slow decreases for the rest of the weak -2% with the 1% increase to finish the week.  Corn had very minor movements all around -1%, -1%+1%

Overall my bids were all to far off and with the market staying pretty stagnant this week my dramatic bids only added to my losses.

I think that all things set aside there is 1 key indicator for the way these Commodity Markets move, and it is Currency Most Importantly Exchange Rates.  I think speculators will always respond to supply/demand weather crop reports. But I think ultimately trade follows the USD. So now I am starting to focus in on the USD/Euro and UDS/CDN exchange rates. This Week they were remarkably comparable.  I am also interested in Gold and its trading patterns.  I just wonder, if for every positive report on the Internet you can find there is an equal negative report.  As for the overall review on the week,  I read that a Buying Signal occurred for Wheat, (so I wonder if there is one coming for Corn as well) as for Soybeans, I think I may now move into positive long contracts. So again I will have to offset and take another loss.

Soybeans probably increased this week because of buying news coming out of China. As well the volume for soybeans was 3X higher then last week that must have helped rally the price up.

I am thinking that Corn and Wheat will trend now closely to the US dollar, there is some sort of consciousness that when the USD goes down I think these commodities will as well.

My focus on the Exchange rates:

1. USD
2. EURO

It will be interesting to see what happens to these rates in anticipation of the upcoming G-20 summit. Topics due include solutions to the debt crisis.

I Offset soybeans tonight, but I am still going with my short strategy for Corn and Wheat! Wish me luck – or lets just hope the USD plunges!

Capricious Moves Market!

Maybe it was my subtle naïve thoughts that if I finally offset my long contracts and moved into the selling game I would start to see some profits.

Wrong!

I moved in with 2 short contacts in both Corn and Wheat.  I figured with all the negative news last week and with no new buying signals triggered by the MACD lines I would be sure to see the market continue in a downward motion.   I am trying to stick to 3 major sources for each commodity. I review the futures.tradingcharts.com Intraday-Daily-Weekly chart terms, I am trying to look at highs and lows, also now I am using some of the technical analysis tools trying to identify trends and buy/selling signals.  Unfortunately I came to the understanding this week that maybe these indicators are not really helping.  2 things could be occurring,

1) There is too much of a lag with the indicators and the actual market is beyond unpredictable

2) These indicators are correct but they are forecasting movements to far in the future.

I put in my bids all below the daily high Corn-576 and Wheat -603.

My Values – what I am trying to trade is overall 1% of the total value; this amount is usually where I start my bidding. I figure that anything under 1% is not significant enough to make a difference on my net position.  Unfortunately we have seen the market rise this week there has been 3 out of the 4 days this week with an overall gain of about 2%. This doesn’t help out my new Short Contract position.

But my strategy is still going to stay the same this week; I am just taking this as a minor rally back from the market after seeing 2 consecutive weeks of significant market decreases.

Soybeans this week moved a day later and in opposite directions from Corn and Wheat, at least I had the right idea with Soybeans, unfortunately my bid were to low at 1155. The markets lowest point this week was 1152 on the 4^th and that’s where I made a small gain.  Wheat moved erratic this week, up-down-up-down anywhere 3 and 4% so I guess my conservative 1% movement is not enough to keep up with the Wheat traders.

The other 2 sources that I am looking at for information are: grainfuturesupdate.com they give a daily technical analysis review of the grain futures.  Today the author identified a sell signal on the daily charts, I am going to follow this a bit further to see if these indicators can really predict some market changes.  Overall my net position was down this week because with the market increasing for Corn and Wheat, and holding pretty steady for soybeans, and myself holding short contracts in all of these I just didn’t make any money. Lastly I have been reviewing the International Grains Council igc.int.  I find this site gives a good Global assessment of our 3 commodities.  I am going to work backwards to see what sort of news was released early in the week for Corn and Wheat to perhaps influence the changes in the market.  There were releases about spring yields being disappointing, economic theories start rolling through my head, decreased supply – increased price.  Also this week talk of increased Demand for Corn in China, again increase in demand results in a higher price… I guess I will just wait and see what the USDA Crop Production and S&D reports disclose.  Soybeans are looking grim for next week as well, Palm Oil is down, and Soybeans finished 8cents off yesterdays close. I will keep with my short position here for sure.  Wheat seemed to be the most erratic this week, overall my position of short was a good strategic move for the week it is just luckless that my price was to low.  Looking today the last dip before the market closed could be due to news that the Ukraine may cancel export duties for wheat and corn, this would increase global competition for exports.

Lastly when I am making decisions for the weeks strategy I look at the trading markets not pertaining to grain commodities. I like to compare how currencies and the Indexes are trading, mostly the UD dollar and the Dow and Nasdaq.  This week I took some interest to the energy and oil futures and see if there was a significant correlation between Corn/Ethanol and in general Oil.  I also am trying to see if there are additional relationships between the grain commodities and the metal futures, (mostly Gold and Copper)

Overall I am going to wait to see if the technical analysis indicators can really make decent predictions with regards to buying and selling signals.

I will continue with my short contacts and re-evaluate by Tuesday is I should re-price my short contacts to a more conservative value.