Welcome to this week’s edition of The Weekly Call, your trusted source for high-quality commodity setups and trading strategies. Since October 2016, our approach has delivered an impressive 777% return, and we continue to share the insights and methodologies that drive these results with this post #408. This week, we’ll explore the latest market trends, actionable trade setups, and global economic factors influencing commodities like sugar, coffee, live cattle, and gold.
Global Economic Overview
The global economic slowdown persists, with inflation gradually easing, yet continuing to create challenges, particularly within the food and agricultural sectors. Recent developments from central banks signal cautious optimism, as global monetary policy shows signs of a more dovish approach, which may help stabilize commodity prices. However, inflation remains a persistent concern, especially after recent economic data indicated that inflationary pressures are not fully subsiding. With the U.S. Consumer Price Index (CPI) reflecting higher-than-expected numbers, there is heightened speculation over potential future interest rate hikes by central banks, which could impact commodity prices and cause increased market volatility.
The disconnect between consumer prices and the declines in commodity prices continues to be an issue. Despite several months of falling commodity prices, the benefits are not being fully transmitted through the supply chain, frustrating both businesses and consumers alike. China’s economic slowdown, particularly within its real estate sector, continues to weigh heavily on global demand for commodities, adding to the uncertainties.
Signs of Bottoming in Commodity Prices
There are emerging signs that commodity prices may be bottoming out, as global central banks shift towards dovish monetary policies and the U.S. dollar shows some weakness. However, this bottoming process may take time, characterized by sideways trading before significant recovery takes hold. Supply chain issues, particularly in energy and food production, could also keep prices from dropping further. Given the uncertain economic environment, traders should remain cautious and expect continued market consolidation across most commodity sectors.
Market-Specific Updates
Sugar
Market Overview: The sugar market continues to exhibit volatility, driven by fluctuating weather conditions. Brazil’s sugar production remains strong, thanks to favorable conditions, but concerns over the potential impact of El Niño are growing. Key sugar-producing regions, including India and Thailand, are on high alert, which could tighten global supply and keep prices supported.
Actionable Insight: Traders should continue to monitor global weather conditions closely. Maintaining long positions seems favorable, with opportunities to buy on dips should short-term corrections take place.
Coffee
Market Overview: Coffee markets remain sensitive to unpredictable weather patterns, particularly in Brazil and Central America, where recent frosts and droughts have added to fears over supply shortages. Rising input costs, such as fertilizers, are also keeping pressure on prices, with concerns about upcoming harvests.
Actionable Insight: Traders should consider staying long, with stops below key support levels. A pullback could offer opportunities to add to long positions, especially if weather conditions worsen in major coffee-producing regions.
Live Cattle
Market Overview: The live cattle market is under pressure from rising feed costs and changing global demand for beef. Drought conditions in key cattle-producing regions have led to tighter supply, but global demand remains robust, providing price support. Reports from the USDA indicate that supply may tighten further as we move into the fall season.
Actionable Insight: Watch for a bullish breakout if prices move above resistance levels. Traders can enter long positions on any signs of a breakout while maintaining cautious stops to guard against downside risks, particularly from changing feed costs or export demand from countries like China.
Gold (GC)
Market Overview: Gold remains a reliable safe-haven asset in the current economic climate. Despite rising bond yields and the Federal Reserve’s uncertain stance on future rate hikes, gold prices have found support due to its appeal amid economic uncertainty and inflationary pressures. Last week’s economic data, particularly from the U.S. CPI, reinforced gold’s appeal as an inflation hedge.
Actionable Insight: Traders should maintain a bullish outlook, with long positions in place as gold continues to consolidate near key resistance levels. Adding to positions on dips may be prudent, with stops placed below key support areas.
Outlook for the Week Ahead
The week ahead promises potential volatility across multiple commodity sectors. Traders should closely monitor central bank policy announcements and any signs of further shifts in interest rate policies. Geopolitical tensions, particularly in regions critical to commodity production such as the Middle East and South America, could lead to sudden supply shocks that would influence prices, particularly in energy and food markets.
Additionally, weather forecasts in key agricultural production regions remain a critical factor for commodities like sugar, coffee, and live cattle. As hurricane season in the U.S. continues, energy markets will also remain sensitive to any disruptions in production or transportation.
Key Data to Watch:
- U.S. inflation reports
- Central bank speeches, especially from the Federal Reserve
- Weather reports from major commodity-producing regions
As always, stay informed and adjust your strategies based on the evolving market conditions. All trades are posted on our Private Twitter Feed for subscribers and are included in the track record posted below under Completed Trades. I am currently trading 15 lots given the account balance and will adjust as necessary based on market developments.
The Weekly Call can now be auto-traded on Striker.com. Just call Striker Securities and open an account of at least $25,000 and every trade I make here will be made for you automatically there. I am planning to use the same methodology and risk management approach with the auto-traded account at Striker that I have been using here. If you have a Daily Update or Trader Triple Play membership, there is no subscription fee for the auto-traded account at Striker. For more information, call Striker.com and speak with William at (800) 669-8838. For more information, you can also watch this video from our subscriber Q&A HERE. Trading futures contracts and commodity options involves substantial risk of loss, and may not be appropriate for all investors. Past performance is no guarantee of future results. Please see our Disclaimer for more information.
The trades below are discussed on the Daily Update: – Click Here for a FREE Trial
Sugar
Coffee
Live Cattle
Gold (GC)
Come see what we are trading – Try our 30 day FREE trial – Click Here
COMPLETED TRADES
Track Record of Completed Trades
The purpose of this blog is to demonstrate how to swing trade futures using our methodology to select high-quality setups and manage the trade with our risk management approach. This track record is based on entries and exits as posted in this blog. I am currently using 15 lots for the Striker trades which is based on this account being over $375,000. Each lot for auto trading at Striker requires $25,000 per lot. See the videos below for more information.
Track Record January 2022 thru December 2022 Click Here.
Track Record January 2021 thru December 2021 Click Here.
Track Record January 2020 thru December 2020 Click Here.
Track Record January 2019 thru December 2019 Click Here.
Track Record January 2018 thru December 2018 Click Here.
Track Record October 2016 – December 2017 Click Here.
*** Trading futures contracts and futures options involves substantial risk of loss, and may not be appropriate for all investors. By reading this web site, you acknowledge and accept that all trading decisions are your sole responsibility. Trading strategies referenced on this web site and associated documents and emails are only suggestions, no representation is being made that they will achieve profits or losses. Past performance is no guarantee of future results.. See our disclaimer here.
Completed trade in Cattle as of November 28th
We expect subscribers to have captured 60% of the swing in live cattle which is over $14,500 in profit using a margin of only $5,115. A great example of using leverage in futures.
Completed Trade in Coffee as of December 12th
The total swing was $37.00 and we expect subscribers to have captured 60% of a wing or $22 in coffee for a profit of over $25,500 using a margin of $8,850. A great example of using leverage in futures. See the video below for the review of the trade.
Completed Trade in Natural Gas as of January 2nd
We were stopped out of out last 1/3 position as weather-related news created a gap down on January 2nd and a possible flat with support at 3.196. This concludes our trade with natural gas; we exit with 550 ticks on 2/3s of a position with $8,500 in profit.
Completed Trade in Coffee as of January 19th
We exited the coffee trade on January 19th with $17 or over $15,000 in profit using a margin of $8,850. A great example of using leverage in futures.
Completed Trade in Gold as of February 8th
We exited the gold trade on February 8th with over $14,000 in profit. We entered on January 3rd and held the trade into the high window. We will re-enter gold in a few weeks after a backtest.
08th Sep 2024
