Week 8 – What Went Right and Wrong
Here’s an overview of last week’s gains and losses
| Crop | Contract | Position | # | Price in | Price out | Gain/Loss |
| Wheat | W2Z | Long | 2 | 869.50 | 890.50 | +2098 |
| Corn | C2Z | Long | 1 | 741.25 | 747.25 | +311.50 |
| Soybeans | S3F | Long | 2 | 1514 | -6275 |
Overall, my equity change last week was -$3865.5.
Upside:
The wheat prices rose 4 days in a row last week before they fell on Friday upon the release of USDA crop estimation report. There have been news about increasing wheat export[1], strong demand for wheat export and export hopes[2] which I think are most likely to be the price driver on the rising wheat prices last week. I have my 2 long W2Z contracts from the week before and I made a price limit to short at price 880. They were offset on Wednesday at price 890.50 which was higher than my price limit.
Downside:
Soybeans prices have been falling. However, it’s not a good idea to just go long based on the fact that the prices seem to be low and go long from the “low” prices. I also forgot to make a Stop Loss order to offset those contracts.
Neutral:
Corn prices have been quite volatile, and the percentage change has been low. I made a price limit which allowed a small margin to offset and it was triggered. However, it might not be a good idea to trade in the corn market at the moment for its volatility and without a clear price trend supported by the fundamental. On the other hand, technical analysis shall still come in play quite well.
Anyways, continue happy trades into the 9th week.
Cheers!
1. Ahad, Abdul. (2012, Nov. 3). EU wheat supported by good export demand, weak euro. Retrieved from http://www.brecorder.com/markets/commodities/europe/88767-eu-wheat-supported-by-good-export-demand-weak-euro-.html
2. Ahad, Abdul. (2012, Nov. 9). US wheat rises with export hopes; corn, soy weak. Retrieved from http://www.brecorder.com/markets/commodities/america/89728-us-wheat-rises-with-export-hopes-corn-soy-weak-.html
Enjoyed reading. Great job!
Well done Roson! I believe that next week, wheat price will go up. The most important reason is still the point that the harvest is coming to an end. There are some other reasons too.
First of all, the market’s focus remained on wheat as expectations of smaller crops in places like Argentina and Australia, coupled with dry conditions in key growing areas of the US Plains, provided support to a commodity that has been stuck in a narrow trading range for months. The supply is decreasing. The price will go up.
Secondly, “Kansas, Colorado and Nebraska are dry and global wheat stocks are falling. At some point this winter wheat business is going to shift back to the US. That time is getting pretty close,” a wheat trader on the floor of the Chicago Board of Trade said. USDA also was seen cutting its global wheat stocks forecast for the second month in a row due to weather-related problems in key growing areas such as Ukraine, Australia and Argentina.
Thirdly, Australia, the world’s second-largest wheat exporter, is expecting a much smaller crop this year, with early harvest showing lower protein scales and poor yields. Traders said rains forecast over the nation’s east coast could slow the harvest. Asia’s top buyers, who rely on Australia for the bulk of their milling wheat supplies, may be forced to import larger volumes of high-protein spring wheat from the United States and Canada. This will also rise the wheat price.
Thanks for the information Peter =]