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 #410. 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 economy remains in a delicate state as inflationary pressures persist despite central banks’ efforts to rein them in. Last week’s key data releases, particularly the U.S. Core Personal Consumption Expenditures (PCE) index, showed a slight increase in inflation, which reinforces concerns that inflation may be more persistent than initially thought. The Federal Reserve’s recent hawkish stance, signaling potential future rate hikes, has rattled markets, adding to the ongoing volatility.
In China, ongoing concerns about the real estate sector and sluggish industrial output continue to weigh on global demand for commodities, especially industrial metals and energy. However, rumors of potential stimulus measures from Beijing have buoyed hopes that demand might recover by year-end, particularly in sectors like infrastructure and energy.
Signs of Bottoming in Commodity Prices
There are tentative signs that some commodity markets are beginning to bottom out after months of price declines. While global monetary tightening and slowing demand from China have weighed heavily on many markets, recent supply-side disruptions and geopolitical tensions have created upward price pressures in select areas. Energy prices, particularly crude oil, have been bolstered by ongoing OPEC+ production cuts, while agricultural commodities like sugar and coffee have seen supply disruptions due to adverse weather conditions.
Market-Specific Updates
Sugar
Market Overview:
The sugar market remains volatile, supported by continued concerns over global weather disruptions. Brazil’s sugar production has been robust, but growing fears over the impact of El Niño in regions like India and Thailand are keeping prices elevated. With sugar cane crops in critical growing stages, supply constraints could tighten further in the coming months.
Actionable Insight:
Traders should monitor global weather reports closely, particularly developments around El Niño. Maintaining long positions seems prudent, as potential supply shocks from Asia could keep upward pressure on prices. Look for buying opportunities on dips, especially if there are short-term corrections.
Coffee
Market Overview:
Coffee prices remain well-supported by adverse weather conditions in Brazil, the world’s largest coffee producer. Concerns over drought and frost have impacted crop yields, with rising input costs—such as fertilizers—adding further upward pressure. The uncertainty around future harvests continues to buoy prices, with little relief expected in the near term.
Actionable Insight:
Given the persistent weather-related risks, traders should maintain long positions, with an eye on further bullish opportunities if the weather situation in Brazil deteriorates. Stops should be placed below key support levels to mitigate downside risks from any short-term market corrections.
Live Cattle
Market Overview:
The live cattle market remains strong, supported by tight supply conditions and robust demand for beef. Rising feed prices have led to concerns that production costs could increase further, impacting margins for producers. However, the USDA’s latest cattle report suggests supply constraints will persist into the fall, keeping prices elevated.
Actionable Insight:
Traders should watch for breakouts above key resistance levels, signaling further upward potential. Long positions remain favorable, particularly as demand remains resilient. However, any significant rise in feed prices could pressure producers, so traders should remain vigilant.
Gold (GC)
Market Overview:
Gold prices have gained momentum in recent weeks, facing headwinds from rising U.S. bond yields and a relatively weak dollar. As a non-yielding asset, gold tends to face downward pressure when bond yields rise. However, gold’s safe-haven appeal remains intact, as inflationary concerns and geopolitical uncertainties continue to loom large. The market is now focused on U.S. economic data, particularly inflation metrics, to determine the trajectory of Federal Reserve policy.
Actionable Insight:
With gold trading near support levels, traders may want to maintain a cautious bullish outlook. Adding to long positions on dips could be wise, with stops placed just below key support areas. Investors will closely monitor inflation data and any signals from the Federal Reserve for signs of a policy shift.
Outlook for the Week Ahead
Looking ahead, traders should brace for continued volatility across commodity markets, with key data releases and geopolitical developments likely to drive price action. Central banks remain cautious in their approach to tightening monetary policy, and any dovish signals could provide a tailwind for precious metals like gold and industrial commodities like copper.
In the energy sector, all eyes will be on U.S. crude inventory data and any further announcements from OPEC+, as supply dynamics remain a critical factor in the market. Natural gas prices will continue to be driven by weather forecasts, particularly in the U.S. and Europe, as both regions prepare for colder temperatures.
Key Data to Watch:
- U.S. PCE inflation and employment reports
- Central bank speeches, particularly from the Federal Reserve
- China’s economic updates, especially any announcements regarding potential stimulus packages
- Global weather reports from key commodity-producing regions
- Geopolitical developments impacting energy supply and trade
As always, stay tuned for more updates, and remember to Trad
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.
29th Sep 2024
