Coffee, Cattle, and Crops: Market Swings Amid Powell & CPI Anticipation

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Coffee

Movers & Shakers by John Thorpe, Senior Broker

Movers and Shakers: Tomorrow (CPI) before the open, CSCO After the close

 

Fed Powell’s testimony in the Senate had the market moving today.

Gold started to sell off well before the testimony began, down $25.00 then as Powell spoke @ 10 EST, the market rallied from that point in somewhat of a slough to unchanged, but struggled to breakout and looks to close a shade off yesterday, down 8 bucks. Holding rates for quite some time longer didn’t add fuel to the current rally. Powell testifies tomorrow in the House, same time.

 

The S&P 500 rallied from Powell’s opening remarks 20 points, then fell back at the 2-hour mark to where it began:6070.00 only to rally NEARLY 30 POINTS FROM THERE AFTER THE CONCLUSION. However, they look to close unchanged at the time of this writing. 6088.00.  This was a very tradeable day.

 

After scanning several markets Energies, Bonds, Dollar index. They all finished the day right about where they were prior to Powell’s opening remarks except for the US Dollar, which closed lower as Gold retained some of its luster.

 

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Corn

WASDE was released this morning as well, whose results weighed on domestic Ag row crop prices, Beans down 6 cents, Corn down 7.5-6.25 for old crop, new crop Dec down a penny (will grains in the future be quoted in pennies with the dissolution of the one cent coin?) Wheat down between 2.5 to 7 cents across the board and protein spectrum. Cotton bucked the trend and had a strong rally after the numbers, up .74 basis the May contract.

 

Coffee

As for the softs, Coffee lost some caffeine today, down from its all-time highs, 15 + cents per pound @ 413.45. This drop comes after a strong rally in recent sessions, fueled by supply concerns and robust demand. However, profit-taking and shifting sentiment in the broader commodities market may have contributed to today’s pullback. Traders will be watching for any signs of renewed momentum or further correction in the days ahead, particularly with currency fluctuations and weather patterns in key coffee-growing regions influencing price action. That’s Coffee!

 

Market volatility is here to stay for the foreseeable future.

Choose your opportunities wisely.

 

Tomorrow: CPI (Consumer Price Index) before the open, Fed Powell Testimony in the House of Representatives 9 am CST, Fed Bostic 11:00 am CST. Earnings: Cisco After the close, CME Group, before the open

March Feeder Cattle

The January 21st QT Chart of the Day alerted readers that the March feeder cattle chart was approaching its third upside PriceCount objective. After reaching this target area, the chart corrected lower and activated downside PriceCounts in the process. At this point, if you can extend its break with new sustained lows, the second count would project a slide to the 261.59 area.

 

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Daily Levels for February 12th, 2025

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Hidden Market Trends: Copper Joins Coffee and Gold in Notable Moves

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Coffee Anyone? Gold? Copper?

COFFEE

 

While most day traders focus on markets like mini SP, MICRO NQ, bonds and few others, some of the other markets have made some noticeable moves. Coffee, Gold and now Copper.

 

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March copper is activating upside PriceCount objectives off the January lows. The first count projects a possible run to the 4.80 area which is consistent with a challenge of the fall high.

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Daily Levels for February 11th, 2025

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Market Movers This Week: Options on Futures, Grains, Hedging, Powell Testimony, CPI & PPI, WASDE, and Earnings Reports

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Cannon Futures Weekly Letter

In Today’s Issue #1229

  • 1099’s Are Available
  • The Week Ahead –
  • Futures 102 – Hedging With grains, Options on Futures
  • Hot Market of the Week – April Hogs
  • Broker’s Trading System of the Week – ES intraday System
  • Trading Levels for Next Week
  • Trading Reports for Next Week

1099’s:

1099 forms will be generated for all futures trading accounts held by US clients that placed any trades during the 2024 calendar year. Traders should expect to receive their 1099 forms via mail, email or through their portal in early February.

 

·    1099 forms will be provided directly from the FCM to the client.

·    To login and retrieve your 1099 for your Cannon account via StoneX click here

·    To login and retrieve your 1099 for your Cannon account via Ironbeam click here

·    To login and retrieve your 1099 for your Cannon account via Dorman click here

For any other FCM’s please contact your broker directly.

Important Notices: The Week Ahead

By John Thorpe, Senior Broker

 

Humphrey Hawkins Testimony week, Fed Chair Powell gives testimony to the Senate Banking Committee beginning @ 9:00 am CST Tuesday the 11th, Wednesday he walks over to the House Financial Committee and answers questions for the congressional body. CPI,PPI! WASDE week! + 5Fed Speakers, 1000’s of midcaps reporting past earnings and future guidance.

Economic releases are relatively light this week with one exception: Consumer Price Index (CPI) pre-market Friday. The Fed Speakers will be at the podium for the foreseeable future as we don’t have another Fed rate decision until late March.

 

Earnings Next Week:

  • Mon. McDonalds
  • Tue. Coca-Cola, Softbank
  • Wed. Cisco
  • Thu.  Applied materials
  • Fri. Quiet

 

 

FED SPEECHES:

  • Mon Quiet
  • Tues. Hammock 7:50 CST, Chair Powell Testimony 9amCST, Bowman and Williams 2:30pmCST
  • Wed. Chair Powell Testimony 9am CST, Bostic 11:00 am CST, Waller 4:05PM,
  • Thu. Quiet
  • Fri. Quiet

Economic Data week:

  • Mon. Consumer inflation expectations
  • Tue. WASDE Ag Numbers 9amCST, NIFB Optimism index
  • Wed. CPI
  • Thur. Initial Jobless Claims, PPI
  • Fri. Retail Sales, Capacity Utilization, Business Inventories

Futures 102: Hedging Grains with Options on Futures

Course Overview

Gain an understanding of how buyers and sellers of grains and oilseeds utilize futures and options to hedge their position to manage price risk.  This course will enhance the hedger’s understanding of the different strategies available as well as how the basis affects prices.

Start 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 and options on futures needs.

Free Trial Available

December 25 Corn

April Hogs satisfied a second upside PriceCount  objective before turning sideways with a range bound trade. At this point, IF the chart can resume its rally with new sustained highs, the third count would project a potential run to the 100.96 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.

Brokers 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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Trading Levels for Next Week

Daily Levels for February 10, 2025

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Trading Reports for Next Week

First Notice (FN), Last trading (LT) Days for the Week:

www.mrci.com

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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.

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Market Watch: Record Highs in Gold & Coffee, Oil Retreats Amid Trade Concerns

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New all-time highs in Gold!

Futures Markets Highlights by Mark O’Brien, Senior Broker

General:

The big one!  It’s that time of the month again: we’re a couple of days from when 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 and the report is released at 7:30 A.M., Central Time on the first Friday of the month.

Softs

New all-time highs in coffee!  The relentless coffee price rally continued today as the March futures contract on the ICE exchange hit a new intra-day record above $4.00 per pound on extremely tight supplies and fears over the outlook for the coming crop.  High: $401.10, settle: $397.75

The ICE coffee futures contract is considered the benchmark to price deals around the world and has moved up more than 15% this year.

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Energy:

Crude oil futures were in retreat on broader demand concerns, tit-for-tat import taxes between the U.S. and China and the prospect of an extended trade war with China, Mexico, Canada and more broadly. Prices already were on the defensive after the EIA revealed U.S. commercial crude oil inventories soared by 8.7 million barrels from the previous week.

Closing at $71.03 per barrel today, the March contract is down over $7.00 per barrel ±10% in two weeks

Not “plugged in” to crude oil? There are three different futures contracts to trade West Texas Intermediate crude oil Traded on the CME Group’s NYMEX, the WTI crude futures contract is the largest energy futures contract in the world by volume.

 

Metals:

New all-time highs in gold! April gold futures – the most-active futures contract – hit a new all-time high – breaching $2,900 per ounce intraday as the dollar pushed lower. The ongoing sentiment among traders: concerns over the new U.S. administration’s tariff measures. Investors are increasingly turning to gold as a store of value amid fears of potential economic slowdowns, inflationary pressures, and trade disruptions. April gold settled up 2.7% at $2,893.00 per ounce, marking a 2.7% gain for the day and reinforcing gold’s strong upward momentum in the face of ongoing market volatility.

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Daily Levels for February 6th, 2025

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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.

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Market Turbulence and Global Tensions: Key Developments in Politics, Economy, and War

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Movers & Shakers by John Thorpe, Senior Broker

Market turbulence and volatility is here to stay for the foreseeable future as global tensions rise.

Choose your opportunities wisely.

Updated: February 4, 2025 11:19 am

WSJ on Tuesday now reporting President Trump and China’s leader Xi will not speak to each other later today

Updated: February 4, 2025 11:24 am

Bloomberg reported on Tuesday that around 20,000 US federal employees accepted buyout offers. The Washington Post today is reporting layoffs of federal employees is likely if too few of them choose to accept buyouts or quit.

 

Updated: February 4, 2025 2:17 pm

Pres. Trump said he would have talks with his Iranian counterpart, but also said Iran is too close to having and cannot have nuclear weapons

 

Updated: February 4, 2025 2:23 pm

Pres Trump he would like to Palestinians taken in by Egypt and Jordan, adding they have no alternative but to leave. He is not in favor of Israeli’s settling in Gaza

Russia – Ukraine War Update

–Reuters reports Ukraine’s military said on Tuesday its air force had struck a Russian military command post in Russia’s Kursk region the previous day causing sustained significant damage and casualties. Reuters could not independently verify the statement.

–Ukraine’s military has reported numerous strikes on Russian military and energy facilities in recent weeks. Ukrainian forces have been battling Russian troops in the Kursk region since Ukraine mounted a cross border operation there last year.

–A pro-Russian Ukrainian paramilitary leader, Armen Sarkisyan, was killed along with one other person, and three more people were wounded in a bomb blast inside a residential building in northwest Moscow, Russian state news agency TASS reports.

–Russia’s Investigative Committee said it opened a criminal inquiry after the explosion on charges of murder by means injurious to the public, attempted murder of two or more people and arms trafficking.

–Ukrainian forces are believed to be behind a series of assassinations in Russia. In mid-December, Russian General Igor Kirillov died in a remote-controlled blast in Moscow.

–The United Nations echoed Ukraine’s growing concerns that Russia killed 79 captured Ukrainian soldiers in 24 separate incidents since September.

–A former United Kingdom MP, Jack Lopresti, has joined the Ukrainian International Legion to help fight against Russia, media reports said. Lopresti reportedly travelled to Kyiv in November to help a charity.

 

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–Russia’s Ministry of Defense said Moscow’s air defense units intercepted and destroyed 70 drones in a Ukrainian offensive overnight. The ministry said Kyiv had also targeted energy facilities, including an oil refinery in Volgograd which had caught fire.

–Ukraine’s military claimed responsibility for strikes on Russian energy facilities, claiming that it hit a Russian oil refinery in Volgograd and a gas processing plant in Astrakhan. Both establishments supplied fuel to the Russian Army, according to the military.

–State Emergency Service workers of Ukraine work at the site of a rocket strike on a residential building in Poltava

Ukrainian rescuers working at the site of a rocket strike on a residential building in Poltava, where at least seven people died and 17 others, including four children, were injured, on February 1, 2025 [Handout/State Emergency Service of Ukraine via EPA-EFE]

–Kyiv’s Air Force said it destroyed 38 of 71 Russian drones launched at Ukraine in an overnight attack. Some 25 drones disappeared from radars without reaching their targets, the Air Force said.

–According to the Reuters news agency, Moscow also said that it was too early for Russia to consider the four-way peace talks model proposed by Zelenskyy, which would include the US, Ukraine, Russia and the EU. Zelenskyy previously said it would be very dangerous if Washington and Moscow held ceasefire talks without involving Kyiv.

–Russia’s Ministry of Foreign Affairs spokesperson, Maria Zakharova, criticized the Finnish government over the publication of an information package for its citizens who are planning or considering volunteering on Ukraine’s side in the ongoing Russia-Ukraine war.

–US President Donald Trump told reporters in the Oval Office that he is seeking a secure supply of rare earth metals from Ukraine in exchange for US aid.

–Moldova’s Foreign Ministry issued a statement denouncing the invasion of its airspace by a drone and said it was discussing with allies how to boost airspace defense. The statement detailed that the drone entered from Ukraine’s airspace, but did not identify the origin or likely operator of the drone.

Tomorrow: Disney before the open, Qualcomm Earnings after the close! ADP, Balance of Trade, Barkin Speech 8am CST, ISM Svcs., Fed Jefferson Speech 6:30 pm CST

 

Daily Levels for February 5th, 2025

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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.

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Russell 2000 Futures

The Russell 2000 Futures contract is a cornerstone of the futures trading world, providing traders with a robust tool to speculate on or hedge against movements in small-cap equity markets. Since its inception, the Russell 2000 Futures, often abbreviated as RUT 2000 Futures, has undergone significant evolution, becoming a vital component of modern futures trading. This piece explores its origins, development, and role in the market, while highlighting why trading futures with Cannon Trading Company is an exceptional choice for traders at all experience levels.

The Birth of the Russell 2000 Futures Contract

The Russell 2000 Index, launched in 1984 by the Frank Russell Company, tracks the performance of the smallest 2,000 stocks within the Russell 3000 Index, representing U.S. small-cap companies. The introduction of the Russell 2000 Futures Contract followed shortly after, in response to increasing demand for products enabling investors to trade on the performance of small-cap stocks in a standardized, liquid manner.

The Key Figures Behind the Inception

Several financial pioneers were instrumental in bringing the Russell 2000 Futures to life. William F. Sharpe, a Nobel laureate and consultant to the Frank Russell Company, helped refine the methodology for index construction. His contributions ensured that the Russell indices offered an accurate reflection of market segments.

The Chicago Mercantile Exchange (CME), a leading futures exchange, played a central role in facilitating the trading of these contracts. Key figures at CME, such as Leo Melamed, known as the “father of financial futures,” were advocates for innovation in derivatives markets. Under Melamed’s leadership, the CME expanded its offerings, including equity index futures like the RUT 2000 Futures.

Early Trading Anecdotes and Challenges

When trading began, many small-cap companies featured in the Russell 2000 were relatively unknown. Traders found the RUT 2000 Futures offered an efficient way to manage exposure to this high-risk, high-reward market segment. Anecdotes from early trading sessions illustrate the volatility of small-cap stocks and the corresponding opportunities in the futures market. For instance, a trader who identified a trend in burgeoning tech startups in the early 1990s could leverage RUT 2000 Futures to magnify returns or hedge against broader market risks.

One notable early trade occurred during the dot-com boom. A hedge fund manager, anticipating a bubble in small-cap tech stocks, used Russell 2000 Futures contracts to short the index. When the bubble burst, this strategic use of futures resulted in substantial profits for the fund, solidifying the contract’s reputation as a powerful tool for both speculation and risk management.

Evolution and Modern-Day Use

Over the decades, the Russell 2000 Futures have evolved in terms of accessibility, technology, and utility. Originally traded in open-outcry pits, the advent of electronic trading platforms revolutionized futures trading. CME’s Globex platform, introduced in 1992, allowed traders worldwide to access RUT 2000 Futures, increasing liquidity and efficiency.

Contract Specifications

The modern Russell 2000 Futures contract has standardized terms that make it attractive to a broad range of traders. Key specifications include:

  • Contract Size: $50 times the Russell 2000 Index value.
  • Tick Size: 0.10 index points, equivalent to $5 per tick.
  • Settlement: Cash-settled to the final index value.

These attributes make it suitable for individual traders and institutional investors alike. Additionally, the introduction of E-mini and Micro E-mini RUT Futures has lowered barriers to entry, enabling smaller traders to participate without excessive capital requirements.

Hypothetical Trading Scenario

Consider a trader bullish on small-cap stocks due to favorable economic conditions. With the Russell 2000 Index trading at 1,800 points, the trader buys two RUT 2000 Futures contracts at this level. Each contract’s notional value is $90,000 ($50 × 1,800), requiring a margin deposit of roughly $6,000 per contract.

The index rises to 1,850, yielding a gain of 50 points. For two contracts, the profit is $5,000 ($50 × 50 points × 2 contracts). This example demonstrates how RUT 2000 Futures enable traders to amplify returns with minimal upfront capital, though the risks of leveraged losses must also be acknowledged.

The Role of Futures Brokers

The evolution of futures trading platforms and brokerage services has been crucial in shaping the market. Futures brokers serve as the backbone of trading, offering access to platforms, market data, and educational resources.

Cannon Trading Company: A Premier Futures Broker

Cannon Trading Company has established itself as a top-tier futures broker, earning 5-star ratings on TrustPilot and accolades for its decades of experience. Here’s why Cannon Trading is a standout choice for trading futures contracts:

  • Diverse Platform Selection: Cannon Trading provides access to industry-leading platforms such as NinjaTrader, TradeStation, and CQG. Each platform is tailored to different trading styles, ensuring both novice and seasoned traders have the tools they need.
  • Educational Resources: Cannon Trading offers extensive resources for futures traders, including market analysis, webinars, and trading guides. This focus on education empowers clients to make informed decisions.
  • Regulatory Excellence: With a stellar reputation among regulatory bodies like the NFA and CFTC, Cannon Trading emphasizes transparency and compliance, giving traders peace of mind.
  • Personalized Service: Unlike generic online brokers, Cannon Trading provides personalized service, pairing clients with experienced brokers who understand their unique needs.

Real-Life Case Studies

Case Study 1: Hedging Risk with RUT 2000 Futures

In 2020, a small-cap mutual fund manager faced uncertainty amid the COVID-19 pandemic. Concerned about potential market downturns, they used RUT 2000 Futures to hedge their portfolio. By selling futures contracts, the manager mitigated losses as the index fell, demonstrating the contracts’ value for risk management.

Case Study 2: Leveraged Gains

An individual futures trader, recognizing strong earnings growth in small-cap companies in 2021, decided to go long on E-mini RUT Futures. With precise entry and exit strategies, the trader achieved a 25% return on initial margin, highlighting the profit potential of leveraged futures trading.

The Future of Russell 2000 Futures Trading

As technology advances, the Russell 2000 Futures market will continue to grow. Innovations like AI-driven trading algorithms and blockchain-based clearing systems promise to enhance efficiency and transparency. Moreover, the increasing globalization of markets means more traders from diverse backgrounds will access RUT 2000 Futures, further boosting liquidity.

The Russell 2000 Futures contract has evolved from a niche product into a vital instrument for traders worldwide. With its origins rooted in the vision of financial pioneers, the RUT 2000 Futures now serve as a powerful tool for hedging and speculation in the small-cap equity market. For traders seeking an exceptional futures broker, Cannon Trading Company stands out for its unparalleled platform selection, regulatory excellence, and client-focused approach. Whether you are a novice futures trader or an experienced market participant, Cannon Trading provides the resources and support necessary to succeed in 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.

Fed Holds Rates Steady Amid Persistent Inflation; Markets React with Volatility

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Futures Brokers USA

What you need to know before trading futures on Jan. 30th:

By Mark O’Brien, Senior Broker

General:

Going into the fed’s meeting this month, financial markets widely expected the central bank to hold interest rates steady, breaking a streak of three consecutive rate cuts.  Pointing to stubborn inflation readings and an economy hardly in need of rescuing, the Fed. did just that: nothing.  “We feel like we don’t need to be in a hurry to make any adjustments,” Fed Chairman Jerome Powell said.   The Fed’s policymaking committee voted unanimously to maintain their target for the federal-funds rate today, at a range of 4.25%-4.5%.  The FOMC announcement noted unemployment “has stabilized at a low level” and “inflation remains somewhat elevated,” which noticeably removed a reference from its prior rate decision of inflation making “progress” toward the 2% target.  Inflation has remained above the Fed’s 2% target for 45 consecutive months and counting.

Stock Indexes:

Stock index futures started oscillating immediately after the fed announcement at 1:00 Central Time, and through Fed chairman Jerome Powell’s 1:30 press conference with the March E-mini S&P 500 trading to daily contract lows just shy of 6040.00 between those events then swinging up over 40 points above 6080 within 30 minutes.

Energy:

Oil prices fell today, with the U.S. benchmark West Texas Intermediate touching a multi-week low after today’s weekly API report showed crude stockpiles rose more than expected last week.

The March crude oil futures contract fell to $72.33 a barrel intraday today, a ±$7.00 per barrel / $7,000 per contract move over just nine trading sessions and the lowest level since Jan. 2.

Grains:

Tightening global corn supplies have had investors’ attention for months and March corn futures have steadily made a bullish move.  Today’s intraday high of $4.97½ per bushel marks a ±80-cent gain since its $4.14 intraday low back on Oct. 17.

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Daily Levels for January 30th, 2024

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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.

Wheat Future Contract

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: Xmas Schedule, Dollar Index Outlook & Trading Levels for Dec. 23rd

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In this issue:

  • StoneX/E-Futures Platform Updates
  •  Important Notices – Christmas Trading Schedule
  • Hot Market of the Week – March US Dollar Index
  • 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:

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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 US Dollar Index

The November 25th QT Chart of the Day alerted readers that the US dollar index had completed its first upside PriceCount objective. The chart proceeded to correct lower which is normal reaction. Now, we are attempting to resume the rally where new sustained highs would project a possible run to the second count to the 109.98 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.
Would you like to get weekly updates on real-time, results of systems mentioned above?
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Daily Levels for December 23, 2024

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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.

Corn Futures Contract

The corn futures contract holds a pivotal place in the world of futures trading, serving as a key tool for agricultural producers, investors, and speculators alike. Its history, evolution, and future prospects provide a fascinating lens through which to explore the complexities of the trading futures market. This article delves into the origins of the corn futures contract, traces its development over time, forecasts its trajectory for 2025, and examines why Cannon Trading Company is a standout brokerage in this domain.

Origins of the Corn Futures Contract

The concept of futures trading emerged in the 19th century, coinciding with the industrialization of agriculture in the United States. Farmers, processors, and distributors faced volatile prices due to unpredictable weather, market demand, and global economic conditions. To address this, the Chicago Board of Trade (CBOT), established in 1848, pioneered standardized contracts for agricultural commodities.

Corn, being a staple crop with vast economic significance, became one of the first commodities to have a futures contract. The introduction of the corn futures contract allowed farmers to lock in prices for their crops before harvest, thereby mitigating the risks associated with fluctuating prices. Similarly, buyers like millers and exporters benefited from the ability to secure a consistent supply at predictable costs. The contract was initially straightforward, detailing a specific quantity of corn to be delivered at a future date, with quality and delivery standards set to minimize disputes.

Evolution of the Corn Futures Contract

Over the decades, the corn futures contract underwent significant transformations to meet the changing demands of the market. The CBOT implemented innovations to enhance liquidity, transparency, and accessibility in futures trading. By the mid-20th century, electronic trading platforms replaced the open outcry system, making it easier for traders worldwide to participate.

Advancements in technology allowed for the introduction of mini and micro corn futures contracts, enabling smaller traders to access the market. Margin requirements and position limits were refined to ensure market stability while accommodating both large-scale institutional investors and individual speculators. Additionally, the rise of algorithmic trading brought new efficiencies and challenges to the trading futures landscape.

As global trade expanded, the corn futures market reflected the crop’s international importance. Corn’s applications diversified, with demand increasing for its use in ethanol production, livestock feed, and processed foods. This broadened the participant base for corn futures contracts, attracting not only agricultural stakeholders but also energy companies, food manufacturers, and hedge funds.

The Corn Futures Market in 2025

Looking ahead to 2025, the corn futures contract is poised for further evolution. Several trends are shaping its trajectory:

  • Sustainability and ESG Factors
    As environmental, social, and governance (ESG) criteria gain prominence, the corn futures market is adapting. Traders and investors are increasingly considering sustainability metrics, such as carbon emissions associated with corn production, when engaging in futures trading.
  • Technological Innovations
    Blockchain technology is expected to enhance traceability and transparency in trading futures. Smart contracts may automate aspects of the corn futures contract, reducing administrative burdens and increasing efficiency.
  • Climate Change and Supply Chain Challenges
    Unpredictable weather patterns, driven by climate change, are likely to make the corn market more volatile. This underscores the importance of corn futures contracts as risk management tools. Enhanced forecasting models and data analytics will play a critical role in navigating these challenges.
  • Global Market Dynamics
    The growing role of emerging markets in global agriculture is anticipated to impact the trading futures ecosystem. Countries like Brazil and Argentina, major corn producers, are likely to influence prices and trading volumes on the CBOT and other exchanges.

Why Cannon Trading Company Excels in Futures Trading

When engaging in trading futures, selecting the right brokerage is crucial. Cannon Trading Company has earned its reputation as a top-tier firm, consistently rated 5 out of 5 stars on TrustPilot. With decades of experience in the futures trading industry, Cannon Trading combines expertise, technology, and exceptional customer service to offer unparalleled support to traders.

Key Advantages of Cannon Trading Company:

  • User-Friendly Platforms
    Cannon Trading provides a range of free trading platforms tailored to diverse trading styles. Whether you are a seasoned professional or a newcomer to trading futures, their platforms are intuitive, reliable, and equipped with advanced charting tools.
  • Regulatory Excellence
    In an industry where trust is paramount, Cannon Trading stands out for its exceptional regulatory reputation. As a member of the National Futures Association (NFA) and registered with the Commodity Futures Trading Commission (CFTC), the firm adheres to the highest standards of compliance and transparency.
  • Personalized Service
    Unlike many large brokerages, Cannon Trading emphasizes personalized service. Their team of experienced brokers works closely with clients to develop customized strategies for corn futures contracts and other commodities.
  • Educational Resources
    For traders seeking to deepen their understanding of futures trading, Cannon Trading offers a wealth of educational materials. From webinars to market analysis, they empower clients with the knowledge needed to succeed in trading futures.
  • Proven Track Record
    Cannon Trading’s decades of experience in the futures trading industry translate into deep market insights and robust risk management strategies. This makes them an ideal partner for navigating the complexities of the corn futures contract.

The Strategic Importance of Corn Futures Contracts

The enduring relevance of the corn futures contract lies in its ability to provide stability and opportunity in an unpredictable market. For farmers, it is a lifeline, enabling them to secure income regardless of market conditions. For investors and speculators, it offers a chance to capitalize on price movements driven by factors like weather, trade policies, and global demand.

In today’s interconnected world, trading futures is more than a financial activity—it’s a way to manage risks and contribute to the smooth functioning of essential supply chains. The versatility of the corn futures contract ensures its place as a cornerstone of the futures trading ecosystem.

The corn futures contract is a testament to the ingenuity of the trading futures market, evolving from its humble beginnings in 19th-century Chicago to a sophisticated global instrument. Its adaptability to changing market conditions and technological advancements underscores its resilience and relevance.

As we look to 2025, the corn futures market is set to embrace innovations that enhance efficiency, sustainability, and inclusivity. For those seeking to navigate this dynamic landscape, Cannon Trading Company offers the expertise, tools, and support needed to excel in futures trading. With its stellar reputation, free trading platforms, and decades of experience, Cannon Trading is the brokerage of choice for those engaging in corn futures contracts and beyond.

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