Stopped out of Soybeans

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I was expecting Soybeans to close lower today, but nowhere near limit down. The market touched limit down during the session and just before that I was stopped out. The overbought nature of the market and the pressure of harvesting were finally able to push the price down with the strengthening of the dollar as the catalyst. Wheat and corn closed limit down for the day and it will be interesting to see how much further wheat will fall.

Having no positions now open, I have a decision to make, whether to take my money and set it aside to build up a reasonable stake once more or to open another position in something. Initially I was leaning towards putting the money aside for the time being. However right now as I see that this correction was across the board, including not just grains, but metals, energies and softs, I think I might instead see if there is something that is worth getting involved in.

So much for my worries at the weekend of feeling comfortable with my position in soybeans. If I don’t quite feel the hunger, I’m not feeling the fear. Of course, I have yet to pull the trigger. I won’t be getting involved tomorrow, it’ll be the following day at the earliest before I open a new position. In the mean time, I will be looking at everything to see what the possibilities are at the moment.

Open Positions

None

Account Details

Account Balance: €585.48
Open Position P/L: €0.00
Account Position: €585.00
Overall P/L: -€1464.52
   

links for 2007-10-02

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Harvesting Pressure, Planting Support

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I did catch some of the market action today and it seemed to me that wheat was pulling up corn and soybeans for most of the day. In the end though, with wheat giving up some of its earlier gains towards the end of the session, the short-term factors weighed heavily on soybeans with the harvest underway and yesterday’s USDA report indicating a better crop condition. The question now is, how much will the coming harvest impact on the bidding for next year’s crops. Northern Brazil still has weather that is too hot and dry for planting and will continue to be like that for the next couple of weeks according to the forecast. I note that soybeans today closed 3 1/4 from the low and 9 off the high. I think I can expect more days like today, with the price of wheat being the supportive factor.

Open Positions

Asset Contract Position Change
Soybeans November 2007 Long -5.87

Account Details

Account Balance: €271.48
Open Position P/L: €437.52
Account Position: €709.00
Overall P/L: -€1341.00
   

Soybeans Finally Take A Breath

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After ten sessions, soybeans finally closed down. I was expecting it and indeed have been waiting for the past three days for it to happen. It seemed very likely that it would need to take a breath, having risen 4% this week alone. With nothing new today to help the bulls push forward and the combines starting to roll out with good weather for the harvest in the US, it was only surprising to me that more profit-taking hadn’t happened earlier in the week. I guess I have China to thank for that. Clearly the market believes it is currently overbought. Now, to wait for next week to see if this breath becomes a breather.

Corn again seems to be of most interest having closed up once again. I suppose when you’ve potentially got the biggest crop since the 1940s, and the reports have been good so far, but the price is still going up, that’s one hell of a surprise and hence big news. Wheat only drew a few wistful sighs from me today as it touched limit-up once again and closed up 24 cents. *sigh*

As my account is now a little healthier, I will be looking for other potential positions over the weekend. It certainly feels like I’ve missed the boat on several opportunities over the last four weeks. It will need some careful consideration, to be covered in my very first WRAP UP.

Open Positions

Asset Contract Position Change
Soybeans November 2007 Long -10.00

Account Details

Account Balance: €271.48
Open Position P/L: €460.00
Account Position: €731.48
Overall P/L: -€1318.52
   

Soybeans Ease the Pain

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Corn seems to be grabbing the bigger headlines today, but for me soybeans continue to play up a storm. Now into it’s tenth successive positive close, soybeans continued to make fresh three year highs, reaching 996’4 early in the session. The USDA‘s weekly exports figure came in comfortably at the higher end of expectations at 513,600 metric tons. It was also reported over night that China will be lowering import duties to help combat hyper-inflation. This news was seen as more important for corn with China obviously needing more for food consumption than they are producing this year, but it was also seen as positive with China being the largest importer of soybeans. Both of these no doubt were the major bullish factors on today’s movements in soybeans.With the November 2007 contract within a whisker of $10 and the following three contracts already above the $10 mark, can this week end by breaking through this resistance point? I doubt it. It may reach the $10 during the session but with the usual closing of positions and weekend hedging, I’m expecting it to do no more than consolidate around or lower than today’s closing price.

Today however marks an important psychological milestone for me as my account finally reaches back over €750. This signifies the last of the lump sums that I deposited into my account several weeks ago. I was hugely over stretched at the time and followed it with more foolish behaviour that eventually with one mistake lost me a huge chunk of my capital. Since then, with my capital so low I was forced to cut right back on my positions and as a consequence missed out on the major movement in wheat recently. That lesson has been hard won, but I believe well learned at this stage. My open position profit also made it over €500, another nice number to reach. Of course, I realise that these are not concrete figures nor that they in fact mean much, but since so much of trading is psychological, it remains important to me. It also means that I have a new goal in mind and as such is a step forward.

I’ll leave you with an excerpt from a short article by Nico Isaac, introducing two publications (Monthly Futures Junctures and Daily Futures Junctures) that provide analysis on commodity markets.

Sorting Soybeans: The media reports are more “mixed” than a bag of beans: “US soybean harvest forecast to be smaller than last years.” — VERSUS — “Soybean acres could be on increase next year.” And, “Soybean harvest faces another threat: freeze damage.” — VERSUS — “There are no specific harvest concerns at this time.”

The September 18 Daily Futures Junctures has ONE clear message: “I believe this is a market to watch this week.”

Open Positions

Asset Contract Position Change
Soybeans November 2007 Long +18.38

Account Details

Account Balance: €271.48
Open Position P/L: €503.52
Account Position: €775.00
Overall P/L: -€1275.00