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 #409. 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 landscape remains complex as signs of easing inflation are counterbalanced by persistent uncertainties, particularly within the energy and agricultural sectors. In the past week, the U.S. Consumer Price Index (CPI) showed inflation holding steady, though some indicators suggest lingering price pressures. Central banks globally are adopting a more cautious tone, with many signaling that they may slow the pace of rate hikes. Despite this dovish outlook, concerns remain around inflation’s impact, particularly with energy costs creeping higher.
China’s economic slowdown, primarily driven by its troubled real estate sector, remains a significant factor dragging on global demand for commodities. The country’s sluggish recovery has had ripple effects across industrial metals and energy markets, creating downside risks for commodity prices globally.
Signs of Bottoming in Commodity Prices
The overall sentiment in the commodity market continues to be one of consolidation. While some commodities show signs of bottoming out due to tighter supply chains and increased demand in specific sectors, global monetary policies and economic slowdown concerns weigh on recovery. The U.S. dollar has weakened slightly, creating a supportive backdrop for commodity prices, but the rebound may take time to materialize fully. The bottoming process across key commodities may be marked by sideways trading before a clear recovery trend emerges.
Market-Specific Updates
Sugar
Market Overview:
Sugar markets remain volatile, with supply concerns heightened by unpredictable weather conditions. Brazil continues to experience favorable production levels, but regions like India and Thailand are bracing for the potential effects of El Niño, which could disrupt the global supply chain later this year. El Niño’s impact on weather patterns may result in lower-than-expected yields, supporting prices in the near term.
Actionable Insight:
Traders should closely monitor weather developments and global output. Maintaining long positions remains favorable, especially in light of the potential for supply disruptions. Watch for buying opportunities on dips if weather-related news triggers short-term corrections.
Coffee
Market Overview:
The coffee market remains highly sensitive to erratic weather conditions in Brazil and Central America. Last week saw renewed concerns about drought in Brazil, exacerbating fears of supply shortages ahead of the next harvest season. Rising input costs, particularly for fertilizer and transportation, are also providing upward pressure on prices.
Actionable Insight:
Given the market’s ongoing bullish momentum, traders should stay long while monitoring for potential pullbacks. Weather remains a key variable, and a worsening drought could present additional opportunities for adding to long positions. Stops should be placed below key support levels to manage risk effectively.
Live Cattle
Market Overview:
The live cattle market has been supported by strong consumer demand, despite rising feed costs. Drought conditions in key cattle-producing areas in the U.S. and South America have led to supply constraints. The USDA’s latest report suggests tighter supply as we approach the fall season, further supporting higher cattle prices.
Actionable Insight:
Traders should look for a breakout above resistance levels, with the potential for further gains as supply tightens. Long positions remain favorable, but attention should be paid to the potential impact of feed price volatility. Monitoring export demand, particularly from China, will also be critical in shaping the market’s direction.
Gold (GC)
Market Overview:
Gold rallied last week and we made our short term target. A drop in the USD and rising bond yields and uncertainty around the Federal Reserve’s monetary policy are counterbalancing each other, with gold finding a balance in the current economic climate. The outlook for inflation, as highlighted by last week’s CPI report, has further bolstered gold’s appeal as a hedge against rising prices.
Actionable Insight:
Traders should maintain a bullish outlook on gold, particularly given its strong support levels. With the potential for further economic uncertainty, adding to long positions on dips may be a sound strategy. However, stops should be placed just below key support to protect against downside risks if yields continue to climb.
Outlook for the Week Ahead
In the week ahead, traders should expect potential volatility across multiple commodity sectors. Central bank meetings and economic data releases, including updates on U.S. inflation and employment figures, will be crucial in determining short-term market sentiment. Geopolitical tensions, particularly in the Middle East, could also affect energy prices, especially crude oil.
Weather patterns, particularly in major agricultural regions like Brazil and Southeast Asia, remain a key driver for sugar, coffee, and livestock markets. As hurricane season in the U.S. continues, energy markets will remain sensitive to potential disruptions in production and transport.
Key Data to Watch:
- U.S. inflation and employment reports
- Federal Reserve announcements and speeches
- Weather reports from key commodity-producing regions
- Geopolitical developments affecting energy and food supply chains
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.
15th Sep 2024
