On Sep 17, 2012, I went long on wheat (W4U). The price in 787.00 and today’s price is 797.75. I gain $537.50. I believed that the price of wheat will go up and I based my decision on several reasons.
First, the government of United States announced that it will buy $40 billion of mortgage-backed debt per month as an aggressive stimulus program to boosted investor appetite for riskier assets.
Second, USAD said on last Thursday that weekly export of wheat were 381,800 tonnes, below forecasts for 450,000 to 600,000 tonnes. The wheat export sales were 573,400 tonnes. That’s because the supply of wheat is decreasing.
Third, Strong winds in western Canada damaged wheat in Saskatchewan and Alberta, causing significant yield losses. This will cause wheat price all the way up.
Fourth, because of the severe drought in America, the production of wheat decreased significantly. As the biggest wheat exporter in the world, the decrease of wheat production will push the price up in the world market.
However, this is only my prediction of long trend. I can’t decide what will exactly happen in the future markets. So, I only bought one contract in the wheat market. I believe that only collect information frequently can us always predict right.
Reference:
http://www.usda.gov/wps/portal/usda/usdahome?navid=DISASTER_ASSISTANCE&parentnav=DISASTER_SAFETY