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Category: Commodity Trading

Investment is a game of money of securing future money by taking a risk today. Trading therefore comes with a list of rules to play by. Commodity trading in particular offers tremendous potential for becoming a completely different asset class.

However, before investing in any kind of commodity, you must do an in depth research and also ask your broker as many questions as possible. Through this category archive we provide you as much information and valuable insights into the world of commodity trading.

We at Cannon Trading are here to help you with your commodity trading needs. You as a trader should select your commodity trading advisor only after performing a due diligence on him/her. We in fact do that for you. This way, you get only the best advice to help you with your commodity trading.

We’ve got the information that you might need at every step of commodity trading, and you’ll find it all right here in the commodity trading section of our blog. Read up, and read on to get equipped!

Gold Investment Guide: Choosing Between Gold Futures and Gold ETFs

Posted on by Jenny Collins

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Price Gold Futures

Discover the right gold investment for you

US stocks gapped lower after Chinese AI competitor DeepSeek rose to the top spot on US app stores over the weekend, supplanting OpenAI. The NASDAQ plunged ~4% before the opening bell. Nvidia shares were routed, loosing some $500B in market cap falling below its 200-day moving average for the first time since fall 2023. The entire AI stack including semiconductors, nearly all things related to data centers, and electrical power generation saw whipsaw pullbacks on worries that a significantly cheaper, opensourced AI model could upend the boom in spending seen around US LLMs. Defensive flows into staples, healthcare, and some small caps could not offset the selling seen across the AI ecosystem, but breadth was much more positive relative to the declines seen in the S&P and NASDAQ. US Treasury markets saw prices surge too, and rates fell ahead of the FOMC meeting. The US 10-year yield fell back to 4.5% before bouncing. The US dollar index remained heavy. Crude and natural gas prices fell. 

If you’re considering investing in gold, you might be wondering whether Gold futures or gold ETFs are the better fit for your portfolio. Our latest article delves into the key differences between these two investment options, helping you make an informed decision.

In this article, we explore:

  • The significant differences in the liquidity, exposure and costs between Gold futures and gold ETFs.
  • How individual investors can participate in the performance of gold.
  • The opportunities for maximizing returns and potential tax advantages of Gold futures.
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Daily Levels for January 28th, 2024

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Economic Reports

provided by: ForexFactory.com
All times are Eastern Time ( New York)
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Good Trading!
About: Cannon Trading is an independent futures brokerage firm established in 1988 in Los Angeles. Our mission is to provide reliable service along with the latest technological advances and choices while keeping our clients informed and educated in the field of futures and commodities trading.
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

NG Futures

Posted on by Ilan

Natural Gas (NG) futures have long captured the imagination of traders and investors worldwide, providing a unique blend of opportunity and volatility. Over the decades, natural gas evolved from a standard utility resource to a speculative commodity that drives significant activity in the futures markets. Understanding how this transition occurred, the factors influencing price movements, and the key figures involved in the rise of NG futures sheds light on their current prominence. Additionally, examining why Cannon Trading Company is a premier choice for trading futures contracts solidifies the importance of aligning with experienced brokers in navigating this dynamic market.

The Evolution of Natural Gas Futures as a Speculative Commodity

Natural gas, historically, was viewed as a straightforward energy resource—a reliable, abundant fuel for heating, electricity, and industrial uses. However, the deregulation of the energy markets in the late 20th century set the stage for its transformation into a speculative commodity. Before deregulation, natural gas prices were tightly controlled by government policies, ensuring stability but limiting market-driven price discovery. The Natural Gas Policy Act of 1978, followed by the full deregulation of wellhead prices in 1989, opened the floodgates for free-market dynamics.

As a result, natural gas began trading on commodity exchanges. The New York Mercantile Exchange (NYMEX) played a pivotal role, launching its first NG futures contracts in 1990. These contracts offered a standardized way to hedge and speculate on natural gas prices, providing transparency and liquidity to the market. Futures traders were drawn to the market’s volatility, driven by weather patterns, geopolitical events, and supply-demand dynamics.

Key Figures in the Rise of NG Futures

  • Richard Sandor: Often dubbed the “father of financial futures,” Sandor’s vision for commodity markets extended to natural gas. His early work laid the groundwork for the development of energy futures, including NG futures.
  • J. Aron & Company: This firm, which later became part of Goldman Sachs, was instrumental in pioneering energy trading strategies. J. Aron’s involvement in the natural gas markets during the early days of deregulation set the tone for speculative activity.
  • Enron Corporation: Enron’s aggressive entry into the natural gas market in the 1990s exemplified the speculative nature of the commodity. The company’s rise and eventual collapse highlighted both the opportunities and risks inherent in NG futures trading.

These key players, alongside innovative traders and market makers, helped shape natural gas into the speculative powerhouse it is today.

Price Movements and Expectations for 2025

Natural gas prices are notoriously volatile due to their sensitivity to supply-demand imbalances, weather conditions, and geopolitical developments. Traders in 2025 can expect this volatility to persist, driven by several key factors:

  1. Weather Patterns and Seasonal Demand
    Natural gas consumption spikes during extreme weather conditions—increasing in winter for heating and in summer for electricity-driven cooling. For instance, during the Polar Vortex of 2021, natural gas prices surged as demand outstripped supply. In 2025, similar weather phenomena could lead to sharp price swings.
  2. Global Liquefied Natural Gas (LNG) Markets
    The growing role of LNG in connecting U.S. natural gas supplies with global markets introduces new layers of complexity. Price movements in 2025 will likely reflect global economic conditions, international demand, and shipping constraints.
  3. Regulatory and Environmental Policies
    With the global push toward renewable energy, regulations affecting fossil fuels will play a significant role. Policies aimed at reducing carbon emissions or incentivizing renewable energy could impact natural gas demand and, consequently, futures prices.
  4. Technological Innovations in Energy Extraction
    Technological advancements in hydraulic fracturing and horizontal drilling have made natural gas extraction more efficient, affecting supply levels. Traders will need to monitor these developments closely in 2025 to anticipate changes in production trends and costs.

Hypothetical Trading Scenario for 2025

A futures trader anticipating a colder-than-usual winter might buy NG futures contracts in late summer when prices are typically lower. If severe weather materializes, driving up demand, the trader could sell the contracts at a premium. Conversely, if the forecast proves inaccurate, the trader could face losses. This scenario underscores the importance of market research and risk management.

In another scenario, a futures trader could analyze global LNG shipping trends and identify potential supply chain disruptions. By purchasing NG futures in anticipation of these disruptions, the trader positions themselves to capitalize on the resulting price increases.

Real-Life Anecdotes and Case Studies

One of the most notable cases in natural gas trading involves hedge fund Amaranth Advisors, which lost $6.6 billion in 2006 due to poorly managed NG futures bets. The firm’s trader, Brian Hunter, had taken large positions expecting a rise in natural gas prices that did not materialize. This cautionary tale emphasizes the inherent risks in futures trading and the need for disciplined strategies.

In contrast, savvy traders like John Arnold, a former Enron trader and founder of Centaurus Advisors, have successfully navigated the natural gas markets. Arnold’s ability to anticipate market trends and manage risk made him a legend in the energy trading world.

Another compelling example is the 2021 winter storm in Texas, which disrupted natural gas supply chains. Traders who had hedged their positions effectively managed to profit from the unforeseen supply shortages. This highlights the value of using NG futures to mitigate risk and capitalize on market opportunities.

Why Choose Cannon Trading Company for Futures Trading?

For traders seeking to navigate the complexities of NG futures, partnering with a reputable broker is paramount. Cannon Trading Company stands out as a top choice for several reasons:

  1. Wide Selection of Top-Performing Trading Platforms
    Cannon Trading offers a range of platforms tailored to meet the needs of both novice and experienced traders. Whether you prefer a user-friendly interface or advanced analytics, Cannon has a platform to suit your trading style.
  2. Decades of Experience
    With over 30 years in the futures markets, Cannon Trading has a deep understanding of market dynamics. Their seasoned brokers provide valuable insights and support, helping traders make informed decisions.
  3. Exemplary Reputation with Regulatory Bodies
    Cannon Trading maintains a stellar reputation with regulatory bodies, ensuring compliance and transparency. This commitment to integrity builds trust with traders and reinforces their position as a leading futures broker.
  4. 5 out of 5-Star Ratings on TrustPilot
    Customer satisfaction is a cornerstone of Cannon Trading’s success. The firm’s high TrustPilot ratings reflect its dedication to providing exceptional service and support.
  5. Comprehensive Educational Resources
    Cannon Trading provides a wealth of educational materials to help traders enhance their knowledge. From webinars to in-depth guides on NG futures, these resources empower traders at every experience level.

Natural gas futures have evolved into a vital component of the global energy markets, offering opportunities for hedging and speculation. The market’s journey from a regulated utility resource to a speculative commodity underscores the transformative power of deregulation and innovation. Traders entering the NG futures market in 2025 can expect continued volatility influenced by weather, global LNG trends, regulatory developments, and technological advancements.

For those looking to trade NG futures, Cannon Trading Company provides the tools, expertise, and trustworthiness needed to succeed. With its wide selection of trading platforms, decades of experience, and impeccable reputation, Cannon Trading is an ideal partner for navigating the dynamic world of futures trading.

For more information, click here.

Ready to start trading futures? Call us at 1(800)454-9572 – Int’l (310)859-9572(International), or email info@cannontrading.com to speak with one of our experienced, Series-3 licensed futures brokers and begin your futures trading journey with Cannon Trading Company today.

Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involve substantial risk of loss and are not suitable for all investors. Past performance is not indicative of future results. Carefully consider if trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

Important: Trading commodity futures and options involves a substantial risk of loss. The recommendations contained in this article are opinions only and do not guarantee any profits. This article is for educational purposes. Past performances are not necessarily indicative of future results.

This article has been generated with the help of AI Technology and modified for accuracy and compliance.

Follow us on all socials: @cannontrading

Futures Trading Insights for Jan. 23rd: Equity Gains, Energy Dips, and Gold Surges

Posted on by Ilan

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C102

What you need to know before trading futures on Jan. 23rd:

By Mark O’Brien, Senior Broker

 

Stock Indexes:  

Equity index futures rose today, powered by a rise in technology stocks after the new administration announced mammoth spending plans for artificial intelligence infrastructure, while the U.S. Dollar Index traded to a two-week low as tariffs were delayed.

Late on Tuesday, Pres. Trump announced that OpenAI, Japan’s SoftBank and Oracle will form a joint venture and invest up to $500 billion to build data AI centers.  Shares of SoftBank surged 10.6% in Tokyo, Oracle gained 7.6% on Wall Street, adding to Tuesday’s 7.2% jump.  The March E-mini Nasdaq lead U.S. stock index futures with a ±1.45% / ±300-point ascent, while the March E-mini S&P 500 gained ±.7% / ±40 points.  The March E-mini Dow lagged somewhat with a ±.25% / 120-poing upswing.

Energy:   

Oil prices eased to a fresh one-week low today as the market considers how the new administration’s proposed tariffs could affect global economic growth and demand for energy.

March West Texas Intermediate crude (WTI) traded 39 cents, or 0.5%, lower to settle at $75.44.

That puts WTI down for a fourth day in a row for the first time since November. Both crude benchmarks – WTI and Brent – closed at their lowest since Jan. 9 for a second day in a row.

Crude Oil numbers will be out tomorrow due to MLK holiday this past Monday.

Metals: 

Gold futures (Feb.) prices traded to near three-month highs Tuesday, fueled in part by the weaker dollar and a seemingly lack of clarity around the new administration’s policy plans, which investors fear could trigger trade wars and elevate market volatility.

Feb. Gold added ±$7 to $2,766 per ounce as of this typing. Prices were at their highest since Nov. 5 when they hit their intraday high of $2,782.8.

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Daily Levels for January 23rd, 2024

 

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Economic Reports

provided by: ForexFactory.com
All times are Eastern Time ( New York)
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Good Trading!
About: Cannon Trading is an independent futures brokerage firm established in 1988 in Los Angeles. Our mission is to provide reliable service along with the latest technological advances and choices while keeping our clients informed and educated in the field of futures and commodities trading.
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

Post-MLK Market Moves: Dollar Dives, Commodities Rally, and Equities Surge

Posted on by Ilan

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C77

Movers and shakers!

By John Thorpe, Senior Broker

 

Post MLK Holiday and the 60th  U.S. Presidential Inauguration the markets are on the move.

 

The U.S.Dollar is getting whacked, down 1.35 ( Crypto headlines emanating from the Whitehouse perhaps?)

 

From the Energy Markets giving back some of their gains “Drill baby Drill” from the past few trading sessions, to the Precious metals , inching a little higher after a tremendous downward push last night producing a Bullish engulfing pattern after today’s session. (lower lows , higher highs and closing on the high side during the same trading session)

Soybeans, really took off, up 33 plus cents in the front months (old Crop) along with all the row crops, Corn, Wheat, Oats. The deferreds were strong as well, Novemebr and Jan 2026 up 20 cents

Equities have re asserted their rally maintaining the bullish push from the day election rally.

ECB President LaGarde Speaks @9:15 CST a.m.

 

Plan your trade and trade your plan

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Daily Levels for January 22nd, 2024

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Economic Reports

provided by: ForexFactory.com
All times are Eastern Time ( New York)
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Good Trading!
About: Cannon Trading is an independent futures brokerage firm established in 1988 in Los Angeles. Our mission is to provide reliable service along with the latest technological advances and choices while keeping our clients informed and educated in the field of futures and commodities trading.
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

Weekly Newsletter: Trading Resources and more! 01.20/21.25

Posted on by Ilan

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MLK2

In this issue:

  • StoneX/E-Futures Platform Updates
  •  Important Notices – MLK Hours, Fed Speeches, Home Sales
  • Futures 102 – World Cup Trading Championship
  • Hot Market of the Week – Dec. 2025 Corn
  • Broker’s Trading System of the Week – ES intraday System
  • Trading Levels for Next Week
  • Trading Reports for Next Week
To our clients whose accounts are with StoneX and currently using the E-Futures Platform:

  • The new StoneX Futures platform will be up and running Monday, Dec. 16th.

 

  • Your existing LIVE user name and password will be accepted.

 

  • Your existing exchange data subscriptions will migrate to the new platform.
  • To login to the new trading interface please login here:

https://m.cqg.com/stonexfutures

  • If you like a demo ( and did not have a demo of StoneX Futures yet) CLICK HERE
  • In the mean time, your E-Futures platform will stay active until a date no earlier than Fri., Dec. 27th, with a firm decommission date to be announced
Important Notices – Next Week Highlights:

The Week Ahead

By John Thorpe, Senior Broker

 

Martin Luther King Holiday Monday, abbreviated trading hours, 271 corporate earnings reports as the season swings into action with Netflix, P & G, JNJ and American Express, Consumer products.

We are in the FED Blackout period leading up to the next FOMC Meeting 11 days from now so there will be no Fed Speakers. Economic data releases including Existing home sales, The feature may be the ECB’s LaGarde speech on Wednesday

 

Earnings Next Week:

  • Mon. none
  • Tue. Netflix after the close
  • Wed. Pre Market P & G, JNJ
  • Thu.  quiet
  • Fri. American Express Pre Market

 

 

FED SPEECHES:

  • Mon. Quiet
  • Tues. Quiet
  • Wed. ECB President LaGarde Speech @ 9:15 am Central
  • Thu. Quiet
  • Fri. Quiet

Economic Data week:

Futures 102: Building a Trading Plan

“He who fails to plan is planning to fail” -Winston Churchill

Traders who win consistently treat trading as a business. While there is no guarantee that you will make money, developing a trading plan is crucial if you want to become consistently successful and thrive in the trading game. Every trader—no matter your experience—needs a plan.

Why are you here?

  • You want to know what constitutes a trading plan
  • You realize you need a trading plan
  • You want to be successful at futures trading

You’re in the right place for any those objectives. At the end of this course, you’ll understand why you need a trading plan and how to build one to support your success as a futures trader.

What is a trading plan?

A trading plan is a business plan for your trading career. Like any business plan, a trading plan is a working document in which you make assumptions about projected costs, revenues, and business conditions. Some of your assumptions may be right, some will surely be wrong. You wouldn’t start a business without a business plan, so why would you start trading without a trading plan?

The real value in writing a trading plan is that it forces you to think about every part of your trading business, including confronting your strengths and weaknesses, and formulating reasonable expectations.

Any solid trading plan consists of the following five components. There are no shortcuts to developing a trading plan that will support your objectives. Take the time now to think about each of these components thoroughly and you will thank yourself later.

 

  1. Objective
  2. Methodology
  3. Risk Management
  4. Trading Strategies
  5. Trader Log
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  • Hot Market of the Week

Hot market of the week is provided by QT Market Center, A Swiss army knife charting package that’s not just for Hedgers, Cooperatives and Farmers alike but also for Spread traders, Swing traders and shorter time frame application for intraday traders with a unique proprietary indicator that can be applied to your specific trading needs.

FREE TRIAL AVAILABLE

 

December 25 Corn

December corn satisfied its first upside PriceCount objective and corrected lower. If the chart can resume its rally with new sustained highs, the second count would project a potential run to the $4.66 area.

PriceCounts – Not about where we’ve been , but where we might be going next!

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The PriceCount study is a tool that can help to project the distance of a move in price. The counts are not intended to be an ‘exact’ science but rather offer a target area for the four objectives which are based off the first leg of a move with each subsequent count having a smaller percentage of being achieved. It is normal for the chart to react by correcting or consolidating at an objective and then either resuming its move or reversing trend. Best utilized in conjunction with other technical tools, PriceCounts offer one more way to analyze charts and help to manage your positions and risk. Learn more at www.qtchartoftheday.com
Trading in futures, options, securities, derivatives or OTC products entails significant risks which must be understood prior to trading and may not be appropriate for all investors. Past performance of actual trades or strategies is not necessarily indicative of future results.

Broker’s Trading System of the Week

With algorithmic trading systems becoming more prevalent in portfolio diversification, the following system has been selected as the broker’s choice for this month.

ES NZL

 

PRODUCT

Mini SP500

SYSTEM TYPE

Day Trading

Recommended Cannon Trading Starting Capital

$36,000

COST

USD 199 / monthly

Get Started

Learn More
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The performance shown above is hypothetical in that the chart represents returns in a model account. The model account rises or falls by the average single contract profit and loss achieved by clients trading actual money pursuant to the listed system’s trading signals on the appropriate dates (client fills), or if no actual client profit or loss available – by the hypothetical single contract profit and loss of trades generated by the system’s trading signals on that day in real time (real‐time) less slippage, or if no real time profit or loss available – by the hypothetical single contract profit and loss of trades generated by running the system logic backwards on back adjusted data. Please read full disclaimer HERE.
Would you like to get weekly updates on real-time, results of systems mentioned above?
Yes
No

Daily Levels for January 20th & 21st, 2025

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Weekly Levels

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Trading Reports for Next Week

First Notice (FN), Last trading (LT) Days for the Week:
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Good Trading!
About: Cannon Trading is an independent futures brokerage firm established in 1988 in Los Angeles. Our mission is to provide reliable service along with the latest technological advances and choices while keeping our clients informed and educated in the field of futures and commodities trading.
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

MLK Trading Schedule & March US Dollar Index: Correction and Potential Rally

Posted on by Ilan

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MLK
This Monday is Martin Luther King holiday in the US.

please see holiday hours below and full schedule here:

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March US Dollar Index

The March dollar is correcting after it satisfied its second upside PriceCount objective. At this point, IF the chart can resume its rally with new sustained highs, the third count would project a possible run to the 114.94 area.

 
The PriceCount study is a tool that can help to project the distance of a move in price. The counts are not intended to be an ‘exact’ science but rather offer a target area for the four objectives which are based off the first leg of a move with each subsequent count having a smaller percentage of being achieved. It is normal for the chart to react by correcting or consolidating at an objective and then either resuming its move or reversing trend. Best utilized in conjunction with other technical tools, PriceCounts offer one more way to analyze charts and help to manage your positions and risk. Learn more at www.qtchartoftheday.com

 

Trading in futures, options, securities, derivatives or OTC products entails significant risks which must be understood prior to trading and may not be appropriate for all investors. Past performance of actual trades or strategies is not necessarily indicative of future results.

Daily Levels for January 16th, 2024

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Economic Reports

provided by: ForexFactory.com
All times are Eastern Time ( New York)
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Good Trading!
About: Cannon Trading is an independent futures brokerage firm established in 1988 in Los Angeles. Our mission is to provide reliable service along with the latest technological advances and choices while keeping our clients informed and educated in the field of futures and commodities trading.
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

Mastering Micro Bitcoin Futures: Basics and Strategies for Traders

Posted on by Ilan

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 Bitcoin

Micro Bitcoin basics

Micro Bitcoin futures (MBT) provide an efficient, cost-effective new way to fine-tune bitcoin exposure and enhance your trading strategies. Offering multiple benefits for traders, it’s important to understand the contract mechanics. This course will cover the basics of Micro Bitcoin futures, the fundamentals behind the contract, and different ways to use.
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Daily Levels for January 14th, 2024

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Economic Reports

provided by: ForexFactory.com
All times are Eastern Time ( New York)
34b2acce f407 4889 bfed 43f1d89b32b9
Good Trading!
About: Cannon Trading is an independent futures brokerage firm established in 1988 in Los Angeles. Our mission is to provide reliable service along with the latest technological advances and choices while keeping our clients informed and educated in the field of futures and commodities trading.
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

Wheat Future Contract

Posted on by Ilan

The wheat future contract has been a cornerstone of the agricultural futures market for centuries, allowing producers, processors, and investors to hedge against price fluctuations in a volatile global market. Today, futures trading has evolved into a sophisticated financial tool supported by cutting-edge technology and regulatory frameworks. This article will explore the evolution of wheat futures and other farm crop contracts, providing real-life anecdotes, case studies, and hypothetical trading scenarios to illustrate their significance. Additionally, we’ll delve into why Cannon Trading Company, with its decades of experience, stellar reputation, and wide selection of free platforms, stands out as a premier choice for trading wheat and other agricultural futures like class 3 milk futures and the corn futures contract.

The Evolution of Wheat Futures and Farm Crop Contracts

The origins of wheat future contracts date back to the mid-19th century with the establishment of the Chicago Board of Trade (CBOT) in 1848. Farmers and grain merchants needed a system to protect themselves from unpredictable price swings caused by weather, supply chain issues, and geopolitical events. Enter the futures market: a standardized contract to buy or sell wheat at a predetermined price on a specific future date.

Over time, the concept expanded to include other farm crop contracts, such as the corn futures contract and class 3 milk futures. Initially, futures trading was dominated by local farmers and merchants. However, the advent of electronic trading in the late 20th century democratized access, attracting institutional investors, hedge funds, and individual traders from around the globe.

Technological advancements have played a pivotal role in this evolution. Today, platforms like those offered by Cannon Trading Company provide traders with real-time market data, advanced charting tools, and risk management features, making futures trading more accessible and efficient than ever before.

Real-Life Anecdotes and Case Studies

The 2008 Wheat Price Surge

One of the most dramatic examples of volatility in the wheat market occurred in 2008. Global wheat prices skyrocketed due to poor harvests, rising demand from emerging markets, and export restrictions imposed by major producing countries. For farmers in the U.S. Midwest, this presented both challenges and opportunities.

A Kansas wheat farmer, for example, used wheat future contracts to lock in a sale price of $12 per bushel in March 2008, months before harvesting. By the time his crop was ready, spot prices had dropped to $8 per bushel due to improved weather conditions and easing supply concerns. His decision to hedge through futures saved his business from significant losses, highlighting the value of futures trading for risk management.

The Corn Belt Hedge Fund

In the 2010s, a small hedge fund based in Illinois recognized the interconnectedness of farm crop contracts. By analyzing weather patterns, they predicted a poor corn harvest in the Midwest, leading them to short corn futures contracts while going long on wheat future contracts due to substitution effects in animal feed markets. Their calculated bets paid off handsomely, yielding a 35% return for the year and showcasing how futures can be used for speculative gains as well as hedging.

Hypothetical Trading Scenario: A Dairy Processor

Imagine a dairy processor who relies on milk as a primary input. Concerned about rising costs, they decide to trade class 3 milk futures to secure a stable price for the next six months. By locking in a price of $17.50 per hundredweight, they mitigate the risk of price spikes caused by fluctuating feed costs for dairy cattle. Meanwhile, a speculator on the other side of the trade takes on the risk, hoping to profit from price movements. This mutually beneficial arrangement demonstrates the dual nature of futures markets: risk transfer and price discovery.

The Role of Cannon Trading Company in Futures Trading

Cannon Trading Company has established itself as a trusted partner for traders of all experience levels. Its wide selection of free platforms, including advanced tools for analyzing wheat future contracts, class 3 milk futures, and the corn futures contract, makes it an excellent choice for anyone engaged in futures trading. Here’s why:

  1. User-Friendly Platforms
    Cannon Trading offers an array of platforms tailored to different trading styles and needs. Whether you’re a novice looking for simplicity or a seasoned trader requiring advanced analytics, Cannon has you covered. Real-time data, customizable charts, and automated trading options empower traders to make informed decisions.
  1. Decades of Experience
    With over three decades in the industry, Cannon Trading has weathered market ups and downs, earning a reputation for reliability and expertise. Their deep understanding of markets like wheat future contracts and farm crop contracts positions them as invaluable advisors to clients navigating the complexities of futures trading.
  1. Regulatory Excellence
    Cannon Trading Company’s exemplary track record with regulatory bodies underscores its commitment to transparency and integrity. In an industry where trust is paramount, this reputation provides peace of mind to traders.
  1. Educational Resources
    For newcomers to futures trading, Cannon offers a wealth of educational resources, including webinars, tutorials, and market analysis. These tools help traders understand the nuances of markets like the corn futures contract and class 3 milk futures, enabling them to trade with confidence.
  1. Stellar Customer Support
    Cannon’s 5-star ratings on TrustPilot reflect its dedication to customer satisfaction. Their team of experienced brokers is available to assist clients with everything from platform setup to strategy development, ensuring a seamless trading experience.

Why Trade Wheat Futures?

Trading wheat future contracts offers several advantages:

  • Risk Management: Farmers and processors can hedge against price fluctuations, ensuring stable income and cost structures.
  • Liquidity: The wheat market is highly liquid, making it easy to enter and exit positions.
  • Leverage: Futures allow traders to control large amounts of wheat with relatively small initial investments, amplifying potential returns (and risks).
  • Diversification: For investors, wheat futures provide exposure to a commodity that behaves differently from stocks and bonds, enhancing portfolio diversification.

Risks and Rewards in Futures Trading

While futures trading offers significant opportunities, it’s not without risks. Leverage can magnify losses as well as gains, and market movements can be unpredictable. However, with the right tools and strategies—like those provided by Cannon Trading Company—traders can navigate these challenges effectively.

The Future of Farm Crop Contracts

As climate change and geopolitical tensions continue to impact agricultural markets, the role of farm crop contracts like wheat future contracts, class 3 milk futures, and the corn futures contract will only grow in importance. Technological innovations, such as blockchain-based smart contracts and AI-driven market analysis, promise to further revolutionize futures trading, making it more transparent and efficient.

The journey of wheat future contracts and other farm crop contracts from their humble beginnings to today’s sophisticated markets is a testament to the resilience and adaptability of the agricultural sector. Real-life examples and hypothetical scenarios illustrate the value of these contracts for hedging and speculation alike. For traders seeking a reliable partner in this dynamic market, Cannon Trading Company stands out with its top-rated platforms, extensive experience, and commitment to customer success.

Whether you’re trading wheat future contracts, class 3 milk futures, or the corn futures contract, Cannon Trading provides the tools and support you need to succeed. By leveraging their expertise and resources, you can navigate the complexities of futures trading with confidence.

For more information, click here.

Ready to start trading futures? Call us at 1(800)454-9572 – Int’l (310)859-9572 (International), or email info@cannontrading.com to speak with one of our experienced, Series-3 licensed futures brokers and begin your futures trading journey with Cannon Trading Company today.

Disclaimer: Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involve substantial risk of loss and are not suitable for all investors. Past performance is not indicative of future results. Carefully consider if trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

Important: Trading commodity futures and options involves a substantial risk of loss. The recommendations contained in this article are opinions only and do not guarantee any profits. This article is for educational purposes. Past performances are not necessarily indicative of future results.

This article has been generated with the help of AI Technology and modified for accuracy and compliance.

 

Weekly Newsletter: Week Ahead+ World Cup Championship, Trading Levels for Jan 13th

Posted on by Ilan

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Listen to our podcast: Subscribe on Apple, Spotify, Amazon, or wherever you listen to podcasts!
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In this issue:

  • StoneX/E-Futures Platform Updates
  •  Important Notices – Earnings, CPI, PPI, Housing
  • Futures 102 – World Cup Trading Championship
  • Hot Market of the Week – March 10 Year Notes
  • Broker’s Trading System of the Week – ES intraday System
  • Trading Levels for Next Week
  • Trading Reports for Next Week
To our clients whose accounts are with StoneX and currently using the E-Futures Platform:

  • The new StoneX Futures platform will be up and running Monday, Dec. 16th.

 

  • Your existing LIVE user name and password will be accepted.

 

  • Your existing exchange data subscriptions will migrate to the new platform.
  • To login to the new trading interface please login here:

https://m.cqg.com/stonexfutures

  • If you like a demo ( and did not have a demo of StoneX Futures yet) CLICK HERE
  • In the mean time, your E-Futures platform will stay active until a date no earlier than Fri., Dec. 27th, with a firm decommission date to be announced
Important Notices – Next Week Highlights:

The Week Ahead

By John Thorpe, Senior Broker

 

766 corporate earnings reports as the season swings into action with the largest U.S. Banks! A number of meaningful Economic data releases including CPI, PPI and There will be a series of FED Speakers throughout the week.

 

Earnings Next Week:

  • Mon. Quiet (59rpts mid and smallcaps)
  • Tue. Quiet (25rpts Mid and smallcaps)
  • Wed. (162 rpts) Pre-Open JP Morgan Chase, Wells Fargo, Goldman Sachs, Black Rock, Citigroup, Bank of NY, Oracle after the close
  • Thu.  ( 186 rpts) Pre-open Tiawan Semiconductor, United HealthCare, BofA, Morgan Stanley, US Bank.
  • Fri. Quiet (108 mid and small caps rpts)

 

FED SPEECHES:

  • Mon. Quiet
  • Tues. Schmid 9 am CST, Williams 2:05 CST
  • Wed. Barkin 8:20 CST, Kashkari 9 am CST, Williams 10 am CST, Goolsbee 11 am CST
  • Thu. Quiet
  • Fri. Quiet

Economic Data week:

  • Mon. Consumer Inflation Expectations,
  • Tues. RedBook, PPI
  • Wed. CPI, NY Empire State Manufacturing Index
  • Thur. Jobless claims, Philly Fed, Retail Sales, Business Inventories, NAHB Housing Market Index
  • Fri. Building Permits, Housing Starts, Industrial Production

Futures 102: World Cup Trading Championship

Minimum Starting Balance

The minimum starting account balance is $10,000 for Futures and $5,000 for Forex.

Win a Bull & Bear Trophy

1st place finishers win a coveted pewter bull and bear trophy. 2nd and 3rd place finishers win beautiful crystal bull and bear trophies.

Global media exposure.

Prove your abilities on the world’s stage and build credibility.

Launch Your Trading Career

Top finishers may be invited to have their trading featured on WorldCupAdvisor.com. Subscribers may pay to follow their trades automatically.

ENTER NOW
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  • Hot Market of the Week

Hot market of the week is provided by QT Market Center, A Swiss army knife charting package that’s not just for Hedgers, Cooperatives and Farmers alike but also for Spread traders, Swing traders and shorter time frame application for intraday traders with a unique proprietary indicator that can be applied to your specific trading needs.

FREE TRIAL AVAILABLE

 

March 10 Year Treasury Notes

The March 10 year treasury notes have resumed their break into a new low. At this point the chart is taking aim at its third downside PriceCount objective to the 106^24 area.

PriceCounts – Not about where we’ve been , but where we might be going next!

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The PriceCount study is a tool that can help to project the distance of a move in price. The counts are not intended to be an ‘exact’ science but rather offer a target area for the four objectives which are based off the first leg of a move with each subsequent count having a smaller percentage of being achieved. It is normal for the chart to react by correcting or consolidating at an objective and then either resuming its move or reversing trend. Best utilized in conjunction with other technical tools, PriceCounts offer one more way to analyze charts and help to manage your positions and risk. Learn more at www.qtchartoftheday.com
Trading in futures, options, securities, derivatives or OTC products entails significant risks which must be understood prior to trading and may not be appropriate for all investors. Past performance of actual trades or strategies is not necessarily indicative of future results.

Broker’s Trading System of the Week

With algorithmic trading systems becoming more prevalent in portfolio diversification, the following system has been selected as the broker’s choice for this month.

ES NZL

 

PRODUCT

Mini SP500

SYSTEM TYPE

Day Trading

Recommended Cannon Trading Starting Capital

$36,000

COST

USD 199 / monthly

Get Started

Learn More
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The performance shown above is hypothetical in that the chart represents returns in a model account. The model account rises or falls by the average single contract profit and loss achieved by clients trading actual money pursuant to the listed system’s trading signals on the appropriate dates (client fills), or if no actual client profit or loss available – by the hypothetical single contract profit and loss of trades generated by the system’s trading signals on that day in real time (real‐time) less slippage, or if no real time profit or loss available – by the hypothetical single contract profit and loss of trades generated by running the system logic backwards on back adjusted data. Please read full disclaimer HERE.
Would you like to get weekly updates on real-time, results of systems mentioned above?
Yes
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Daily Levels for January 13th, 2025

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Weekly Levels

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Trading Reports for Next Week

First Notice (FN), Last trading (LT) Days for the Week:
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Good Trading!
About: Cannon Trading is an independent futures brokerage firm established in 1988 in Los Angeles. Our mission is to provide reliable service along with the latest technological advances and choices while keeping our clients informed and educated in the field of futures and commodities trading.
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.

Market Highlights and Key Announcements: Jobless Claims, Non-Farm Payrolls, and Commodity Winners

Posted on by Ilan

Pass the Knowledge – Feel Free to Forward to a Friend!

Join our Private Facebook group

Subscribe to our YouTube Channel

Listen to our podcast: Subscribe on Apple, Spotify, Amazon, or wherever you listen to podcasts!
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Bullet Points, Highlights, Announcements

By Mark O’Brien, Senior Broker

 

General:

 

In a one-day early release, the Labor Department said on Wednesday that the number of Americans filing new applications for unemployment benefits fell to an 11-month low last week.  Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 201,000 for the week ending Jan. 4, the lowest level since February 2024.  The report was published a day early as federal government offices are closed today in honor of former President Jimmy Carter who died on Dec. 29 at the age of 100.

 

Coming up tomorrow, the first Friday of the month, the Labor Dept. releases its monthly Non-farm payrolls report.  It’s widely considered to be one of the most important and influential measures of the U.S. economy.  Forecasters predict the U.S. created a modest 155,000 new jobs in the final month of 2024.  The economy added 227,000 jobs in November. The unemployment rate is forecast to be unchanged at 4.2%.  The report is released at 7:30 A.M., Central Time.

 

Stock Indexes:

 

U.S. stock index futures closed today in a mark of respect for the late former president.  President Joe Biden declared a National Day of Mourning following Carter’s passing.

 

Grains:

 

Also due out Friday: the latest USDA crop production and world supply & demand report as well as the final production numbers and stocks as of Dec. 1.  These reports are released at 11:00 A.M. Central Time.

 

Softs:

 

The hands down 2024 commodity price gain winner: cocoa.  Despite new all-time highs in Bitcoin futures, eclipsing 110,00 in mid-December and gold surpassing $2,800 per ounce in late October, cocoa nearly tripled in price over 2024, far outpacing other commodities.  The March ’25 futures contract hit an intraday and record high of $12,931 a metric ton on Dec. 18.  Top cocoa producers Ivory Coast and Ghana have suffered crop losses due to adverse weather and bean disease.

 

Energy:

 

In the meantime, Brent and West Texas Intermediate crude oil futures posted a second consecutive annual decline in 2024 as supply outstripped a rebound in demand growth.

 
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Daily Levels for January 10th, 2024

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Economic Reports

provided by: ForexFactory.com
All times are Eastern Time ( New York)
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Good Trading!
About: Cannon Trading is an independent futures brokerage firm established in 1988 in Los Angeles. Our mission is to provide reliable service along with the latest technological advances and choices while keeping our clients informed and educated in the field of futures and commodities trading.
Trading Futures, Options on Futures, and retail off-exchange foreign currency transactions involves substantial risk of loss and is not suitable for all investors. You should carefully consider whether trading is suitable for you in light of your circumstances, knowledge, and financial resources. You may lose all or more of your initial investment. Opinions, market data, and recommendations are subject to change at any time.
RISK DISCLOSURE: Past results are not necessarily indicative of future results. The risk of loss in futures trading can be substantial, carefully consider the inherent risks of such an investment in light of your financial condition.