We’ve seen a lot of mustard on the price action in rough rice since we initiated our long May 2011 futures position – but for all that, we are just about where we started:
Which, actually, is perfectly fine with me. Since I generally use a 15-day low as my stop on these trades, a week or two of sideways trading is great, because it raises the stop – and hence, lowers the risk on the trade.
When entering this trade at the beginning of the month, we really had to use 13.50 cents as the stop. After a couple weeks of sideways action, we can raise that up to around 15.00, or even 15.50.
For the fundamental reasons and motivation behind this trade, see the article I wrote for Hard Assets Investor: Why We’re Setting Up For a Rally in Rice.