Monthly Archives: September 2013

This is a busy week! Busy making money in the future game and catching the tail of the gorgeous summer! Well, it starts raining this morning, and I finally grab the chance to stay at home and take a break. And it’s blog time!

Here is my open position:

I started trading on Tuesday morning this week, when I suddenly found that the price of wheat is growing crazy, like climbing Grouse Mountain. I immediately bought in some wheat, hoping to get on this crazy roaring bus! And it turned out that I was pretty lucky. Here I am, smiling at the top of Grouse. 🙂

I didn’t change much about my portfolio of corn and soybean since these two guys were quite boring this week. Price of corn is fluctuating between 4.48 and 4.59, with no clue to predict which direction it is heading for. Price of soybean is even more stable, hovering around 13.17, losing its direction. Guess this is the human nature. When there is no information, people will just gamble on the commodity future, which leads to a zero-sum game of all.

Here are some important lessons I learned in this happy week:

1. Get up early, watch the news and trade.
2. Pay attention to the weather report around the world.
3. Always set a limit or stop price instead of the market price.

It seems the price of agriculture commodities depends a lot on the weather, which has a strong impact on yield in this harvest season. If you get up early to check out the weather report and sign some contracts before anyone else does, then there will be a great chance to make some money in the rest of the day. This is the law of information spread, right?

PS:

We know that recent frosts in Argentina have caused a crazy increase in wheat price this week. But it is also reported that “Argentina expects a large crop of wheat next November despite recent frosts”. And the USDA will release Quarterly grain stocks figures on Monday. I am sure next week will be much more exciting!

Have a nice weekend!

The beauty of future is that it is unpredictable, which gives us a lot of surprising and depressing moments. Like sitting in a roller coaster, we never know what will happen in the next 0.1 second. Our future trading game is the same.

Instead of being a rational trader, concerning about every single movement of the market price and every update of the international news, I choose to be an emotional player, letting my feelings lead the way and enjoying the excitement of the game, rather than worrying when the next fall will come.

In this sense, I start my first venture, longing for corn and shorting for soybeans. I make this decision simply because I treat the graph as a roller coaster trip. When price is hitting the ground, it will bounce anyway. It seems the price of corn is almost at its lowest, so I bet it will go up in the coming week.

The graph for soybeans tells another story. It seems that the soybeans’ roller coaster has more fun. The price has gone through some peaks and troughs in the past few months, and it is now at an unstable and relatively high situation. So I bet it will go down and take a breath in the coming week.

Besides the excitement of going up and down, roller coaster can also bring us different views of the park. So I start to look around and see what happen in the corn and soybeans fields.

Firstly, the forecasts of the size of the 2013 corn and soybean crops come into my eyes. It is said that the average corn yield is 155.3 bushels per acre, larger than the August forecast. Another harvest report indicated that despite the late planting and recent drought weather, the corn in the southern area of the US is growing healthily, contributing to a four times larger yield than last year, which is even more than the forecast. However, good weather will not last for long. The coming fall freeze is predicted to threat the maturity of the remaining crop. It is reported that the corn crop will experience freeze-related yield loss in some parts of the Corn Belt. Given the harvested acreage and demand of corn unchanged, the price of corn will suffer some droughts recently, but still has a chance to surge in the coming autumn. Plus, the supply of corn in Argentina has dropped in this season, which gives me more motivation to hold the corn for long.

The situation of soybeans is quite opposite to the corn. The September forecasts reported a decrease in the average soybean yield, compared to the August one. While USDA said that the soybeans will yield slightly larger than last year. Anyway, rain has started to save the soybean fields recently, giving some hope to the soybeans yield. South America has also reported an increase in the record of soybean area. Wish it will make some contribution to the supply of the soybeans market.

After all these views, it seems that I should insist on my first choice. And I am going to find out the story of wheat next week.

This is my journey of the first week. Thank you for watching!

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