Week 3 Trading – Road Ahead

I do not have a particular strategy prepay, but I should definitely consider placing a price limit on orders to minimize my losses for all commodities contracts. Even when I am holding my contracts over the longer term period, I should be consistently checking the daily news to see what goes on in the market such that I would become more reactive to what goes on in the market, and would be able to minimize losses and recoup more profits.

Since we have a decline in corn imports by China, this also hurts US corn prices. China, as one of the world largest importer, also produces large quantity of corn along with other stocks.

This sufficiently helps domestic demand, but at the same time, the country could import supplies from the US to build its reserves

According to the US Grain Council, production is expected to increase by 5 million to 6 million tones yoy both yields and planted areas, but the group did not estimate the total size of the China’s 2012 corn harvest by looking at historical harvest in 2011.

This info indicates that we are not aware of the decrease in size of corn imports from the US to China as a result of higher harvest. All we know is that US imports of corn to China’d decrease.

As I observed a decrease in corn imports by China from the latest news this past Friday, I expect that, over a short period of time, there are profitable opportunities by putting on short positions for wheat and corn.

As risk averse investor, I will try putting a price limit prior to investing.

With a huge loss of over $12,000, I’ve learned my painful lesson.. to become a more prudent investor.

On the other hand, if I were to invest in soybeans. I would consider setting a limit and take on a long position. As I’ve seen from the USDA weekly report, soybeans sales has reached its highest in three months at 1.3 million tonnes of exports (as indicated in Business recorder, Pakastanian ‘s Financial Daily). I expect demand for soybeans would continue to increase as imports increase.

Hopefully, the snowfall is not so severe in the United States.. as this might create damage to soybeans and corn crops in the Mid-Northwest areas.