Commodity HQ

Commodities and Trade Tariffs

Wed, 20 Feb 2019 07:00:00 -0500

An ongoing trade battle between the United States and China has magnified the impact of tariffs on commodity prices and economic growth. As we’ll soon see, trade barriers have a ripple effect on global markets, influencing everything from commodities to foreign direct investment (FDI).

Like any other market, commodities are influenced by a range of technical and fundamental factors. In the current macroeconomic climate, trade tensions are having a direct impact on commodities such as agriculture and crude oil. That’s because the two largest superpowers, the United States and China, have engaged in a tit-for-tat trade war that threatens to throw global economic growth off stride.

The impact has already been felt. China’s economy is fresh off its worst year of expansion in nearly three decades and the International Monetary Fund (IMF) has already lowered its growth outlook this year and in 2020 over the perceived trade threat. As a large consumer of commodities, China’s slowdown has had a direct impact on how commodities are priced.

Learn here about how an interest rate hike can affect commodities.

Factors Affecting Natural Gas Prices

Wed, 06 Feb 2019 07:00:00 -0500

Like any other commodity, natural gas is influenced by the forces of supply and demand. An understanding of both supply- and demand-side factors can help investors better evaluate fluctuations in natural gas prices to better gauge future market trends.

Natural gas prices have fluctuated wildly over the past three months. While this is partly influenced by the overall state of the energy sector, seasonal influences have contributed to the dramatic rise – and fall – in natural gas prices. An expected warm spell in February has placed further downward pressure on the commodity.

Learn here about how an interest rate hike can affect commodities.

Understanding Basis Risk

Wed, 23 Jan 2019 07:00:00 -0500

Traders venturing into the futures market for the first time need to consider the inherent risks associated with derivatives contracts and how they can be mitigated using hedging strategies. The first stop on our list is a concept called Basis Risk.

This article will help you understand the different types of basis risks that a trader may be exposed to.

Henry Hub Natural Gas Futures

Wed, 09 Jan 2019 07:00:00 -0500

Henry Hub is the leading benchmark for U.S. natural gas futures. The story behind its rise to prominence sheds light on the relevance of transparency and liquidity in futures trading.

USDA Crop Production Report

Wed, 26 Dec 2018 07:00:00 -0500

Agriculture represents a key component of the commodities sector and overall U.S. economy. Investors seeking exposure to this sector are strongly urged to follow monthly crop production figures released by the U.S. government.

A quick glance at the data can yield valuable insights on the health and performance of agricultural goods.

Learn here about choosing the right commodity mutual fund.

EIA Natural Gas Report

Wed, 12 Dec 2018 07:00:00 -0500

Every week, the U.S. Energy Information Administration (EIA) releases the Natural Gas Report, which provides the latest reading on the nation’s energy reserves. The report provides commodity traders with a more comprehensive account of supply and demand as it pertains to natural gas and the broader energy market.

What Are USDA Prospective Planting Reports?

Wed, 28 Nov 2018 07:00:00 -0500

Agricultural commodities can be difficult to predict due to unexpected weather and competing incentives for farmers. Fortunately, there are many tools that commodity traders use to make predictions, including long-term weather forecasts and reports like the USDA’s Prospective Plantings report.

In this article, we will take a look at the USDA Prospective Plantings report, also known as the Planting Intentions report, and how commodity traders can interpret the data.

Click here to learn about choosing the right commodity mutual fund.

Everything Investors Need to Know About Sugar Futures

Wed, 14 Nov 2018 07:00:00 -0500

There are a number of agricultural commodities that occupy both analysts and investors time, but there’s one with high volume that often seems to go unnoticed, and that’s sugar.

Wheat, corn and soybeans usually dominate the headlines as they pertain to agricultural investments with high daily volumes and their impact on global food supply and newly developed industries like biofuels. But sugar is a vital component in the food industry used in everything from food manufacturing to soda beverages like Coca-Cola.

One thing investors will note about many agricultural commodities like wheat is that there may be more than one type of contract that covers different varieties or strains of that crop. Similarly, they will notice that there are two different sugar contracts to choose from – world sugar #11 and U.S. sugar #16.

But unlike other commodities, the difference in sugar futures contracts isn’t the commodity itself, but rather where it trades. As the name suggests, sugar may be global (world sugar #11) or domestic (U.S. sugar #16). The reason is due to subsidies paid to sugar farmers and tariffs that tax the importation of sugar from other countries.

Learn more here about choosing the right commodity mutual fund.

Getting to Know the WASDE Monthly Report From the USDA

Wed, 31 Oct 2018 07:00:00 -0400

For investors of agricultural commodities, there’s no single piece of information more important than the WASDE monthly report.

The USDA releases a report covering world agricultural supply and demand estimates known as WASDE, which is often a source of volatility in commodities markets.

As the premier agricultural report, investors should be familiar with the language and understand what kinds of details the report contains as it relates to agricultural commodities. As a globally traded asset, agricultural commodities are prone to regional specifics, like weather, which investors may not be aware of otherwise. In addition, the report contains global estimates for supply and demand giving investors a baseline for understanding price movements and agricultural commodity fundamentals.

Using the Commodity Channel Index to Spot Trends

Wed, 17 Oct 2018 07:00:00 -0400

Commodities traders often use strategies including mean reversion and other technical indicators to trade commodities. In order to do so, they need to measure the volatility and momentum trends in a commodity.

The Commodity Channel Index (CCI) helps investors identify changes in momentum by analyzing the current price level relative to an average price level over a given period of time – typically 20 days. From this information, investors can spot momentum trends and reversions in a trade.

In this article, we’ll break down the concepts used in the CCI and explain how they can be analyzed in context with a few examples.

Click here to learn more about choosing the right commodity fund.

What is the Commodity Channel Index (CCI)?

Wed, 03 Oct 2018 07:00:00 -0400

Traders often use mean reversion strategies to profit from volatility and momentum strategies to profit from trends – and both of these strategies rely heavily on momentum oscillators.

Day traders look for short-term moves away from the mean and use scalping strategies to profit from a return to the average, while swing or position traders use the same technical indicators to spot changes in trends. So, it’s important for all kinds of traders to understand how to use popular momentum oscillators to their advantage.

In this article, we will look at one of the most popular technical indicators for these kinds of strategies – the Commodity Channel Index, or CCI.

Click here to know more about technical indicators.

The Importance of Liquidity in Commodity Markets

Wed, 19 Sep 2018 08:00:00 -0400

Liquidity is a concept that investors often overlook. In a standard brokerage account with a stock portfolio, liquidity isn’t really a factor. Stocks can be traded and sold at a moment’s notice so investors never really see the effect that a lack of liquidity can have on an investment portfolio.

Investors might remember what happened to the real estate market in late 2008 and the subsequent market crash that followed. Mortgages are illiquid investments that can’t easily be converted to another medium like stocks can. When the real estate bubble collapsed, investors were left holding properties valued at less than they owed on the mortgage and the lack of buyers meant many ended up in foreclosure.

The key to being successful in the commodities market is knowing what kind of liquidity differences come with each investment and how to avoid making costly mistakes.

To learn more about investing in commodities, be sure to follow our education section here.

Major commodities traded on U.S. Exchanges

Wed, 05 Sep 2018 08:00:00 -0400

Like stocks or bonds, commodities are considered a separate asset class that investors can hold in a portfolio.

A commodity is a commercial good that is used in trade and exchangeable with other commodities of the same type. Investors should note how commodities are different from stocks, which are shares of a publicly traded company, and bonds, which are debt instruments issued by companies and government agencies.

Some commodities, like oil or gold, investors may already be familiar with, but there are many other types that are traded daily around the world. Prices are affected by a number of things ranging from supply and demand, the value of the U.S. dollar, weather, and more. With around 30 different types of commodities available, investors have the ability to fine-tune their portfolio and gain access to a more diverse range of investments to boost returns or mitigate risks.

To learn more about different commodities, click here to visit our commodities section.

When it Comes to Commodities, Ignore the Mutual Funds and Stick to ETFs

Wed, 22 Aug 2018 08:00:00 -0400

Investors have numerous resources when it comes to buying and selling stocks or bonds, but the options for gaining exposure to commodities are more limited.

Global Commodities Weekly Roundup: August 8

Wed, 08 Aug 2018 08:00:00 -0400

CommodityHQ.com provides weekly information about any material impact of a major economic, corporate and/or geopolitical event on the global commodities market. The report also analyzes the weekly change in prices of the major commodity futures and commodity focused ETFs as a result of market changing events and trends. This report covers events and analysis for the weeks ranging August 1st to August 8th.

Global Commodities Weekly Roundup: August 2

Thu, 02 Aug 2018 08:00:00 -0400

CommodityHQ.com provides weekly information about any material impact of a major economic, corporate and/or geopolitical event on the global commodities market. The report also analyzes the weekly change in prices of the major commodity futures and commodity focused ETFs as a result of market-changing events and trends. This report covers events and analysis for the week ranging from July 25th to August 1st.

Global Commodities Weekly Roundup: July 26

Thu, 26 Jul 2018 08:00:00 -0400

CommodityHQ.com provides weekly information about any material impact of a major economic, corporate and/or geopolitical event on the global commodities market. The report also analyzes the weekly change in prices of the major commodity futures and commodity focused ETFs as a result of market-changing events and trends. This report covers events and analysis for the weeks ranging from July 18th to July 25th.

Global Commodities Weekly Roundup: July 19

Thu, 19 Jul 2018 08:00:00 -0400

CommodityHQ.com provides weekly information about any material impact of a major economic, corporate and/or geopolitical event on the global commodities market. The report also analyzes the weekly change in prices of the major commodity futures and commodity focused ETFs as a result of market-changing events and trends. This report covers events and analysis for the weeks ranging from July 11th to July 18th.

Global Commodities Weekly Roundup: July 12

Thu, 12 Jul 2018 08:00:00 -0400

CommodityHQ.com provides weekly information about any material impact of a major economic, corporate and/or geopolitical event on the global commodities market. The report also analyzes the weekly change in prices of the major commodity futures and commodity focused ETFs as a result of market-changing events and trends. This report covers events and analysis for the weeks ranging from July 4th to July 11th.

Global Commodities Weekly Roundup: July 5

Thu, 05 Jul 2018 08:00:00 -0400

CommodityHQ.com provides weekly information about any material impact of a major economic, corporate and/or geopolitical event on the global commodities market. The report also analyzes the weekly change in prices of the major commodity futures and commodity focused ETFs as a result of market-changing events and trends. This report covers events and analysis for the weeks ranging June 27th to July 4th.

Global Commodities Weekly Roundup: June 28

Thu, 28 Jun 2018 08:00:00 -0400

CommodityHQ.com provides weekly information about any material impact of a major economic, corporate and/or geopolitical event on the global commodities market. The report also analyzes the weekly change in prices of the major commodity futures and commodity focused ETFs as a result of market-changing events and trends. This report covers events and analysis for the weeks ranging June 20th to June 27th.

Global Commodities Weekly Roundup: June 21

Thu, 21 Jun 2018 08:00:00 -0400

Global Commodities Weekly Roundup: June 14

Thu, 14 Jun 2018 08:00:00 -0400

CommodityHQ.com provides weekly information about any material impact of a major economic, corporate and/or geopolitical event on the global commodities market. The report also analyzes the weekly change in prices of the major commodity futures and commodity focused ETFs as a result of market-changing events and trends. This report covers events and analysis for the weeks ranging June 6th to June 13th.

Global Commodities Weekly Roundup: June 7

Thu, 07 Jun 2018 13:52:00 -0400

CommodityHQ.com provides weekly information about any material impact of a major economic, corporate and/or geopolitical event on the global commodities market. The report also analyzes the weekly change in prices of the major commodity futures and commodity focused ETFs as a result of market-changing events and trends. This report covers events and analysis for the weeks ranging May 30th to June 6th.

Global Commodities Weekly Roundup: May 31

Thu, 31 May 2018 08:00:00 -0400

CommodityHQ.com provides weekly information about any material impact of a major economic, corporate and/or geopolitical event on the global commodities market. The report also analyzes the weekly change in prices of the major commodity futures and commodity focused ETFs as a result of market-changing events and trends. This report covers events and analysis for the weeks ranging May 23rd to May 30th.

Global Commodities Weekly Roundup: May 24

Thu, 24 May 2018 08:00:00 -0400

CommodityHQ.com provides weekly information about any material impact of a major economic, corporate and/or geopolitical event on the global commodities market. The report also analyzes the weekly change in prices of the major commodity futures and commodity focused ETFs as a result of market-changing events and trends. This report covers events and analysis for the weeks ranging May 16th to May 23rd.

Global Commodities Weekly Roundup: May 17

Thu, 17 May 2018 08:00:00 -0400

CommodityHQ.com provides weekly information about any material impact of a major economic, corporate and/or geopolitical event on the global commodities market. The report also analyzes the weekly change in prices of the major commodity futures and commodity focused ETFs as a result of market-changing events and trends. This report covers events and analysis for the weeks ranging May 9th to May 16th.

Global Commodities Weekly Roundup: May 10

Thu, 10 May 2018 08:00:00 -0400

CommodityHQ.com provides weekly information about any material impact of a major economic, corporate and/or geopolitical event on the global commodities market. The report also analyzes the weekly change in prices of the major commodity futures and commodity focused ETFs as a result of market-changing events and trends. This report covers events and analysis for the weeks ranging May 2nd to May 9th.

Global Commodities Weekly Roundup: May 3

Thu, 03 May 2018 10:00:00 -0400

CommodityHQ.com provides weekly information about any material impact of a major economic, corporate and/or geopolitical event on the global commodities market. The report also analyzes the weekly change in prices of the major commodity futures and commodity focused ETFs as a result of market-changing events and trends. This report covers events and analysis for the weeks ranging April 25th to May 2nd

Global Commodities Weekly Roundup: April 26

Thu, 26 Apr 2018 08:00:00 -0400