Sean Pledger

On Thursday the USDA released their report on World Agriculture Supply and Demand and Crop Production. As we saw a month ago these reports can have a dramatic effect on agricultural commodity prices. So this week I tried to take advantage of potential price shocks. After reviewing a number of different articles and blogs on Wednesday I set a number of positions and price limit triggers. Going into the Thursday morning release my positions were as follows:

Short Dec Corn – in at 745.50 for 1 and 756.25 for 2

Long Mar Soy – in at 1573.00 for 2 (I lost a substantial amount of money on these)

Long Dec Wheat – in at 869.25 for 2

With triggers set to:

Long 6 corn at 745 then short again at 755.

Short 4 soy at 1475.

Short 2 wheat at 864 and 890 for 4.

The corn triggers were meant to reverse my 3 shorts into 3 longs at 745 to take advantage of a possible rise in prices, then at 755 lock in the higher short price. This didn’t exactly go as planned as there appeared to be a lag in execution. This happened to work out in my favour. By the time the shorts were executed the price was up to 770.50. As a result I’m currently holding 6 shorts on December corn with prices at 745.50 for 1, 756.25 for 2 and 770.50 for 3.

The soy triggers were intended to offset my longs and switch them to a short position when the price rose. Here again the delay in execution worked in my favour, not executing until a price of 1520.75 for March soybeans. Which, on Friday was sitting at 1492.00.

The wheat triggers were set as a stop loss and a price limit. Here events didn’t work out quite as planned. The stop loss trigger offset my long positions before the prices rose however the upper limit was still triggered giving me 2 shorts at 890. The Friday closing price was 856.75.

All in all it was a profitable 2 days, taking my equity balance from $33860 on Wednesday night to $45692 on Friday night.