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Oct 7 / Roson

Week 3 – What Went Wrong: negative return came from little effort

This week, I have learned quite a few lessons:

  1. Don’t expect you can gain anything while not putting in any or much effort (at least a certainly No for me);
  2. Don’t make any hasty decision (while you haven’t really thought it through);
  3. Please don’t make any major move because you are desperate.

The corn, wheat, soybeans futures went high up last Friday after the release of the USDA quarterly Grain Stocks report.  I expected that wheat and soybeans prices would at least go up for another day (ie. Monday), simply based on the lower than expected stocks reported and the fact that a few of corn futures went limit up while wheat and soybeans futures didn’t.  I was not 100% sure about my expectation/intuition but I still went ahead and placed orders to offset all my soybeans contracts (1 short on Nov 2012, 1 long on May 2013) and ordered 1 long on Nov 2012 soybeans and 1 long on May 2012 (at a lower price than the price-in of the long contract I just offset).  I also ordered 1 long on Dec 2012 wheat.  I placed the orders over the weekend so they got in when the market opened again on Monday.

I didn’t get to pay attention to the news or prices until late on Monday, only to find out all wheat and soybeans futures prices fell that day, corn futures continued to rise. It turned out to be totally opposite to my expectation.   From my prices in, there was about 7 cents fall for the Dec 2012 wheat, 13 cents fall for the Nov 2012 soybeans and 10 cents fall for the May 2013 soybeans. I lost about $1500 on Monday.  I saw on the news that the slow export demand and rain forecast in the drought areas expected to boost the winter wheat seeding which were probably the reasons driving down the wheat futures prices. As for soybeans, it seems that the soybeans futures prices (became weak) went down with the downward prices of palm oil (substitute to soybean oil)[1] . I didn’t think much and just kept my contracts there.  Their prices continued to fall on Tuesday and fell to quite low points which increased my loss to about $5000. I know the news was still about the rain and it’s possible the prices would still go down. However, I really don’t want to offset my contracts and realize such a big loss.  I decided to keep my long contracts and, on the other hand, ordered 2 short contracts on Jan 2013 soybeans, in the hope of gaining something back (in a short term: 1-2 days) while waiting for the overall prices to go back up (in a long term).

I initially wanted to place 20 short contracts on Jan 2013 instead of 2 to “compensate for the loss” (with a big IF, if the price would continue to fall).  I am glad I didn’t do that because the soybeans futures prices actually went up a bit on Wednesday and went up quite a bit on Thursday due to unexpected low yield of Canada’s canola crop (substitute)[2].   I regretted my decision and placed to offset the 2 short soybeans contracts which came through on Friday with a realized loss of $2151.  I think I really need to regroup and straighten out my thoughts before I make any future moves. Therefore, I am still keeping the long contracts: 1 long on Dec 2012 wheat, 1 long on Nov 2012 soybeans and 1 long on May 2013 soybeans with an unrealized loss of about $4000.

My conclusion is no more hasty decision or neglection is allowed!



1. Naeem, Asad. (2012, Oct. 1). EU wheat follows falling US futures after sharp rally.  Retrieved from

2. Plume, Karl and Arasu, K.T.  (2012, Oct. 4). U.S. soybeans rally on damage to canola crop. Retrieved from




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  1. Vicky Wu / Oct 7 2012

    WOW Roson! Your week sure resembles my wheat disastrous trading days from last week! I think it’s good that you didn’t actually place 20 short contracts for soybean though! It would’ve been great if price went down, but seeing how the price actually went up slightly on Wednesday, 20 contracts could have had a significant impact on your balance in a bad way!

    The thing with following the news is that even if we do follow the news really closely, they only report the past or the present, and never the future. I always find news that tells us what has just happened with the market a few minutes or even a few seconds ago, but we don’t really need them to tell us that. Then again they are not responsible for our predictions in the market. We better learn to combine all the factors we can gather and make more accurate predictions in the coming weeks!

    I guess the lesson is to stay out of the market unless you are following closely with the news! Hopefully next week will be better for you!

  2. Roson / Oct 7 2012

    I’ll take your advice. =P

  3. realmelo / Oct 8 2012

    Hey Roson!

    I think majority of us are having a rough week with regards to the trading game.

    I agree with Vicky, combine all factors. Try looking at who the major players are and see how factors influencing their production (like weather) are affecting output as well as demand.

    If you are trading soybeans talk to Andrew P. He’s been having great success trading soybeans. He may have some tips for you.

    Good luck!

  4. Roson / Oct 13 2012

    Thanks Melo!
    I saw your comment last week and forgot to reply. =p
    Hope your trading have gone well this week. =]

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