Another “should have been no brainier” source of information is Google News. https://news.google.ca/nwshp?hl=en
Instead of searching the web, click on news and search for a particular commodity. A vast array of news from different sources will will appear like any other google search. It’s a little bit more convenient trying to gauge if a source is credible or not doing it this way.
What is the plan now?
I’ve been trading wheat since week 1 and I’ve been conisistent with the factors I’ve been looking at. Weather will continue to play a role in production for the different major players and I will continue to take a look at that. I will closely look at the storm in the east coast and see if it will affect production.
I have also been contemplating trying to trade with other commodities. If I do decide to trade corn or soybeans I would still take a look at weather because it is arguably the biggest factor for production. The biggest difference though is if I do a trade for one, I’ll do the same trade for the other due to their substitutability.
It’s week six and finally I have gone above break even!
Due to my smashed car window I wasn’t able to do any trades at the start of the week. It was kind of a blessing in disguise (I guess) for my trading game.
On Wednesday Ukraine announced that they were going to ban wheat exports in mid-November (http://ictsd.org/i/news/bridgesweekly/148222/). It was no surprise then that prices rose. My plan when I read the news was to go short and take advantage of the high price and go long when speculators cause prices to drop when they demand short contracts to offset their own long contracts. The following day, Thursday, prices did fall and I was able to gain some money.
I went short on two Dec. Wheat contracts Wednesday at $890. Prices dropped on Thursday and I was able to get out at $879; gained $549 per contract for total gains of $1061.00.
My total equity is now $41062.57
I don’t know why it took me this long to use an iPhone app for this trading game. (Thanks Gabi!)
An app that’s useful to use for news on commodities is The Crop Site by Benchmark Holdings Ltd. It’s an app that releases various reports and news articles on what’s going on in the world of commodities.
What is my plan to regain all my losses?
The plan remains the same for wheat. It is important to take a look at the production conditions in Australia and in the EU. If conditions continue to move in a negative direction watch prices to continue to rise. If prices do rise, then I’ll probably take a short position on wheat and offset when prices drop as speculators offset their own long contracts from the rising prices.
If production seems to improve though resulting in falling prices, I will probably take a closer look on what is going on to gauge which position I should take. If it was a temporary thing then I’d take a long position on wheat to take advantage of the low price and offset when prices rise again.
It is week 5 and things are looking good for me. After week 1 I lost some money, I regained proper form and got some of that back.
For weeks I’ve been reading about the production problems in various parts of the world, mainly in Australia and the EU. As such, for weeks I’ve been getting used to TradeSim and waiting for prices to go high enough. With my long contracts I got the prices high enough and offset everything Thursday.
My Dec. wheat contracts only got me $11.5 per 3 contracts and my March contracts got me 1449 per 3 contracts. Now i am at $39964.37. I started the week at 33629.73.
Prices did rise because production in the EU and Australia are still bad, implying world stocks will get cut. With the US weather continuing to improve and harvest improving, demand for US wheat should increase at the end of the year. That should increase prices.(http://www.insidefutures.com/article/814454/Morning%20Grains%2010/18/12.html)
Here is a website that I’ve found with different news on wheat to get a perspective of how things are going:
http://www.agriculture.com/markets/analysis/wheat/wheat-falls-on-dem-concerns_11-ar26879
Here is one that I’m going to use as well to see how the currencies of the different countries are doing as well:
http://www.cnbc.com/id/15839178
With my 3 trades for Dec wheat still long, I still expect prices to rise somewhat from droughts in EU and in Australia. I tried to add another trade for Mar13 wheat going long (http://www.guardian.co.uk/environment/2012/oct/12/wheat-corn-stocks-fall-2013-drought?newsfeed=true) with speculation that wheat stocks are going to fall in 2013. However, the trade I put on didn’t get in right away (again) and is still pending so that cannot be good for my futures trading.
If certain reports are correct though, that world stocks didn’t fall as forecasted lowering US wheat demand (http://www.agriculture.com/markets/analysis/wheat/wheat-falls-on-dem-concerns_11-ar26879), I might just offset this trade come Monday and try to minimize my losses on the other 3 trades. If the US dollar strengthens, this will further lower demand for US wheat and I will further be in a whole.
Next Monday, we shall see how it all turns up. How the US economy recovers and how production is in Australia and the EU will determine my going long or short.
Week 4 ended with me gaining some of my lost money. What went good? From my previous research I thought that wheat prices would go up and as a result I went long on wheat.
With my previous week’s trades “in-prices” being too high, it had to be the case where the prices of wheat would go high enough so my loses wouldn’t be too bad. That was the idea going in to this week. I also went long a little bit more on Dec wheat. In the middle of the week I was floating at $33000 to $34707.12.
With reports coming in from the US that wheat stocks were going to fall in 2013 (http://www.guardian.co.uk/environment/2012/oct/12/wheat-corn-stocks-fall-2013-drought?newsfeed=true) and that EU wheat was lower (http://www.guardian.co.uk/environment/2012/oct/12/wheat-corn-stocks-fall-2013-drought?newsfeed=true) I was able to get out at $886 on Thursday. Obviously prices rose with news of lower stocks. From my previous trades, I made a loss of $838.5 but gained $249 on another.
I had 3 more trades on wheat where I was able to get in at $864.75 and with prices rising to $886, I gained $1062.50 for all three. By Thursday my equity was $38768.65.
Unfortunately prices dropped before I could close those trades, my equity ended up dropping to $34381.19, lower than what I started at. (Thanks traders closing their trade after prices rose the day before and lower exports http://af.reuters.com/article/commoditiesNews/idAFL3E8LC4UU20121012).
A new site that has different information on various commodities is the futures.tradingcharts.com website. Contains a variety of information on different commodities that includes production from different areas.
Check it out!
www.futures.tradingcharts.com
