Commodity Compass

     Weekly Update: February 27, 2023 Trading Portfolio : (It is a link to Google Sheets) General Major News/Economic Developments Russia turns to the Chinese Yuan in an effort to ditch the Dollar. The move deepens the ties between the two countries that have long been rivals for regional dominance.  US unemployment fell to a 53-year low. The economy shows strength in early 2023. Goldman struggling with the Fintech and the consumer banking side of the business. Chinese chipmakers that receive US funds banned from expanding in China for a decade. Metals Developments/News The trade I placed last week on Gold Futures ended up getting stopped out for a 3pt loss at $1840. You can track the trades from the link below the header! Gold The price action in Gold continues to show small signs of strength that seem to be getting sold into.  My long-term view on Gold still stands as the dominant idea for the commodity: Dollar value may be cooling, but with rate hike fears ov...

 The Coffee Paradox     Since the beginning of the coffee trade, the raw material and the final product have become increasingly different. The final, consumer-loved coffee is not only a drink but also an experience. Coffee shop ambiance, barista service, and fancy coffee drinks are three fundamental components alongside your cup of joe. Your final cup of coffee is the sum of the attributes from its origin and additions from the value chain actors.      Power in the coffee business comes from capturing the value-adding aspects of the trade while undermining material costs where possible. The trade is spread across 50+ developing countries and employs millions of small farmers. Unfortunately, these farmers benefit the least from the modern coffee trade.  The global value chain in coffee is as follows:     We can track it from producer to processor to wholesaler to retailer to consumer. At the lowest level, inputs include fuel, fertilizer, pes...

    Weekly Update: February 21, 2023 Hello! Not too many significant developments this week to take note of, but the technical story for oil worked out very well and there has developed a nice setup for Gold futures. Taking technical trades backed with macro stories seems to be the money maker. Tight risk and overall where you can, risk off.  I will also be looking into and reading some books on some of the soft (cocoa, coffee) in order to develop a deeper understanding. I will begin to hone in on those commodities that I understand and can work with best. Hopefully, readers can expect some commodity-specific posts throughout this week and next apart from these weekly overviews. As always, feel free to leave comments and suggestions. General Major News/Economic Developments The Earthquake in Turkey is an added wrench on top of Turkey's already fragile economy. With a heavy reliance on funding from allies, whilst battling rapid inflation, the added millions that requi...

   Weekly Update: February 13, 2023 Hello, welcome to the second post. You will now begin seeing daily candlestick charts as opposed to last week's longer-term view. Weekly charts will be posted approx. once a month, and Monthly charts once a quarter. I also plan to release a purely technical overview of these 9 commodities.  Find some more information on the way some commodities are quoted, as well as a deeper dive into the two most popular types of coffee. I'd also like to take a moment to preview a fresh paper trading portfolio of $1mm (will reevaluate this if needed for things like margin requirements when holding positions in multiple commodities). There have not been any trades yet in this account. Additionally, I am setting up a trading team focusing on commodities through the Math-Finance Group. We will have 3 teams of analysts becoming experts in their sector and providing weekly trade ideas and market updates that will also be summarized here. The trading portfo...

 Weekly Update: February 6, 2023 This will be the general format for a weekly update post. I will be following closely a select handful of commodities that are of the most interest to me, providing technical and fundamental analysis of each. Products may deviate from time to time based on what is hot and trending, but generally, these will be my main focus. As of this post, the bulk of my interest lies in Coffee/Cocoa (Softs), Gold (Precious Metals), and Crude Oil (Energy). General Major News/Economic Developments U.S. Trade deficit hits a record $948.1b in 2022 as the US continues to rely heavily on imports Major imports include Machines/Computing, Vehicles, and Oil/Fuel. In-country developments in these areas could be key to unlocking a lower trade deficit and cheaper prices for technology and fuel domestically.  North Dakota city turns against plans for a Chinese-owned corn mill $700mm corn mill near the Minnesota border by a Chinese company was in the works, citing new job...

    Primer: Metal Commodities History Metal commodities, especially since the industrial revolution, have been a backbone to just about all economies. From basic engines and machines to complex copper wiring and microchips, metals are embedded in almost every single part of modern life. Gold and silver that were once used as direct currency now offer investors a store of value and a "hedge against inflation". Industrial metals such as copper, iron, and tin have been instrumental in many machines, tools, weapons, and other technological developments. Top Product Groups Iron Ore Copper Aluminum Nickel Zinc Lead Gold Silver Basic Supply Chain The supply chain for metal commodities can be complex and involve several stages, from mining and extraction to processing and refining to manufacturing and distribution. A general overview of the supply chain for metal commodities: Mining and extraction: The first stage of the metal commodity supply chain involves the extraction of raw...

   Primer: Energy Commodities History Energy commodities have been a critical part of human civilization for centuries, providing the fuel and power necessary for economic and social development. The use of wood as an energy source dates back to ancient times, and it was later supplemented by the use of coal in the industrial revolution of the 18th and 19th centuries. In the late 19th and early 20th centuries, the discovery and production of oil revolutionized the energy industry, leading to the widespread use of petroleum as a source of fuel for transportation and industry. The discovery of crude oil as a cheap alternative to whale oil to power oil lamps was the pivotal development that launched the industry as a whole. In the latter half of the 20th century, the rise of nuclear power and alternative energy sources such as solar and wind power began to challenge the dominance of fossil fuels. Today, the energy market is dominated by a mix of traditional fossil fuels and renew...