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 #411. 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 past week was marked by significant economic data releases, continued inflation concerns, and notable movements across commodity markets. On Friday, the U.S. Department of Labor released the highly anticipated non-farm payrolls report, which showed an increase of 336,000 jobs in September, far exceeding expectations of around 170,000. This stronger-than-expected data has further fueled speculation that the Federal Reserve may take a more aggressive stance on interest rates. Market participants have grown concerned that inflationary pressures remain entrenched, especially given robust employment figures, which may keep wage pressures high.
The job report and other key economic data—such as ISM Manufacturing and Services PMI—have painted a mixed picture of the U.S. economy. While growth is evident in certain sectors, concerns remain about the broader global slowdown, particularly in China, and the impact of tighter monetary policy on future growth.
Signs of Bottoming in Commodity Prices
Commodity prices across several sectors continue to face headwinds, but there are emerging signs that prices may be bottoming out. The weaker U.S. dollar, which has been slightly retreating after hitting highs earlier this year, has provided some relief for dollar-denominated commodities like gold and oil. However, the broader macroeconomic landscape—particularly the trajectory of inflation and interest rates—remains uncertain, keeping markets on edge.
Market-Specific Updates
Sugar
Market Overview: Sugar prices have seen support from supply constraints and unfavorable weather conditions in Brazil and India. Adverse weather, including drought and floods, continues to disrupt production, keeping prices elevated. The ongoing threat of El Niño remains a key factor for the market, with many anticipating further volatility as the event unfolds.
Actionable Insight: Maintaining long positions is favorable, particularly given the potential for further supply disruptions in Brazil and India. Traders should monitor weather patterns closely and consider buying on dips if prices experience short-term corrections.
Coffee
Market Overview: Coffee prices have remained elevated, driven by the impact of drought conditions in key producing regions such as Brazil. These weather disruptions have caused supply shortages, pushing prices to multi-week highs. Rising input costs, including transportation and fertilizer, have also added upward pressure.
Actionable Insight: Given the tight supply situation, traders should consider staying long while monitoring weather conditions in Brazil. The ongoing threat of supply shortages means prices could continue to rise, with opportunities to add to long positions on pullbacks.
Live Cattle
Market Overview: Live cattle prices remain strong, supported by tight supply conditions and robust demand for beef. However, rising feed costs, driven by drought in key grain-producing regions, have introduced a risk to the broader cattle market. The USDA’s latest report indicates that supply constraints may persist into the fall season, keeping prices elevated.
Actionable Insight: Traders should monitor feed prices closely, as any significant increase could impact cattle producers’ margins and, in turn, affect cattle prices. Nonetheless, long positions remain favorable in the short term as supply constraints continue.
Gold (GC)
Market Overview: Gold saw fluctuations last week, impacted by rising U.S. bond yields and the strengthening U.S. dollar. Despite these pressures, gold’s safe-haven appeal remains intact amid continued inflation concerns and uncertainty over the Federal Reserve’s rate hike trajectory. Friday’s strong jobs data added downward pressure, as investors reassess the likelihood of another rate hike by year-end.
Actionable Insight: Gold remains a hedge against economic uncertainty, and the market may find support at key technical levels in the event of further macroeconomic volatility. Traders should consider maintaining a bullish outlook, especially if geopolitical tensions escalate or inflation concerns worsen.
Energy Commentary
Crude Oil (CL)
Market Overview: Oil prices have remained elevated, bolstered by ongoing OPEC+ production cuts, particularly from Saudi Arabia and Russia. On Friday, oil markets saw further gains following U.S. inventory reports showing continued drawdowns, signaling strong demand. The International Energy Agency (IEA) has forecasted tighter oil markets through the end of the year, contributing to the bullish sentiment.
Actionable Insight: With supply-side constraints still in play, crude oil markets remain sensitive to any new developments from OPEC+ or geopolitical risks. Traders should watch for any adjustments in production levels or further data on global demand, particularly from China. Long positions remain favorable as oil markets continue to trend higher.
Natural Gas (NG)
Market Overview: Natural gas prices have seen upward momentum, driven by forecasts of cooler-than-expected temperatures in key U.S. regions, boosting heating demand. European demand for liquefied natural gas (LNG) remains strong as the region prepares for winter. Lower-than-expected inventory levels have also supported prices, adding further tightness to the market.
Actionable Insight: The outlook for natural gas remains bullish, especially as the winter heating season approaches. Traders should monitor weather forecasts and any potential supply disruptions that could further tighten the market.
Outlook for the Week Ahead
This week, traders will closely monitor U.S. inflation data, specifically the Producer Price Index (PPI) and the Consumer Price Index (CPI), as they could provide further insight into inflationary trends and the Federal Reserve’s next steps on interest rates. In addition, the minutes from the last FOMC meeting, set to be released later in the week, will likely be a major driver of market sentiment.
Energy markets will continue to focus on OPEC+ production news and U.S. inventory data, while agricultural commodities like sugar and coffee will be shaped by global weather patterns. For metals, gold and copper will be highly influenced by U.S. economic data and any further developments from China regarding potential stimulus.
Key Data to Watch:
- U.S. PPI and CPI reports
- FOMC meeting minutes
- U.S. inventory reports (crude oil and natural gas)
- Weather forecasts in key 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.
06th Oct 2024
