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Elgrey
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Expat finance professional living and working in Hong Kong.
  • My June, July-14 Strategy

    Summer is here with us. Warm beer, sweaty girls... You know, summer))) OK, plans for rest of June and July.

    Soybeans - short, short, short. Re-established shorts right after WASDE. The price is way too high, crops are abundant, weather is fine.

    Soy oil - continue shorting as seasonals and fundamentals are bearish.

    Cotton - shorting here too! I need to justify my logo after all! But seriously speaking, reasons are the same as with soy - seasonal trend, abundant stocks, good crop condition.

    Cocoa - I had strangle position meaning that I was shorting calls and puts simultaneously. This means I would benefit if the price would be below call strike and above put strike. I closed put leg when prices rallied to 33 months highs and put became very cheap but still long way before expiring. So now with just short calls left in portfolio, I am effectively short cocoa and I continue shorting this market because no matter recent price rally I do not believe it is real - fundamentals are slightly bearish - very good main and mid crops in Africa overweight fears of deficit. You know, deficit is still at "maybe" status but good crops are facts. Buy the rumor, sell the fact. And a few hours ago prices declined strongly, and I think this is only the beginning.

    Coffee - as long as harvesting is on its way in Brazil I am shorting coffee market.

    Natural gas - inventories are being re-built, El Nino promises a mild summer - I am bear and I plan to remain such until August unless something bad happens.

    Heating Oil - I closed my bearish position the first day markets reacted to tensions in Iraq and saved most of my profit. I had plans to wait until prices drop to close my bearish stance and build bullish position for next few months but markets are unpredictable and they rallied without bottoming. Therefore I will wait. Current rally is not a long-term one, it may crack any moment as it is driven by politics not supply and demand. If you like to ride crazy waves - it is up to you but I prefer to make money with cold head and without nerves and hassle. So I am waiting.

    Corn - coming weeks will be very important as corn pollination begins. I do not expect big surprises here but I better wait before building bearish position. Also, I want to see a technical bump before doing so.

    Jun 13 12:03 AM | Link | Comment!
  • My May-14 (And A Bit Further) Strategy Review

    OK, let's review the May.

    Soybeans - I held my short stance during May and early June, added puts transforming bearish position into a strange and received double inflows. I closed position right before WASDE report to avoid any fluctuations.

    Cotton - some time along May I reconsidered and opened short position which was the right move. Basically I recalled history when markets heat up in May - starting from May Cotton prices decrease. I was right.

    Coffee - no unexpected events.

    Cocoa - here I was wrong. Markets shoot up. Nevermind, this only deteriorated value on my put leg of the strangle and I booked profit buying back options at deep discount.

    Heating Oil - I was right, prices declined.

    Gasoline - I quit position for now, booked profit and sit on the sides.

    Natural Gas - I was short but most of the market was long. However this strength ended and prices are heading south. I expect further weakness and increased my short position.

    Soy Oil - I am shorting it and I have been right for now.

    Jun 12 12:31 AM | Link | Comment!
  • My May-14 (And A Bit Further) Strategy (Add-On)

    Soybeans and Soy Oil - after last WASDE report I added bullish position to my short position and effectively changed it into range bet for coming 2 months. However, I am suggesting to short current rally cause it has no firm ground. My guess that between now and end of July prices will be within USD13-15. I also suggest shorting Soy Oil for the whole summer. Seasonally trend is bearish plus there are plentiful stocks of palm oil, a major rival for this commodity.

    Natural Gas - after last two bearish injections I increased my short positioning on Nat Gas. There is however still a possibility of price hike between now and mid of June from purely historical perspective but with every big injection chances become slimmer.

    RBOB Gasoline - I closed my shorts a few days ago just before prices shoot up. In my opinion this is a false start and I am waiting for prices to pull back to initiate long position. I expect pullback between now and end of June into 2.8+ area.

    May 22 11:40 PM | Link | Comment!
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