Commodity Traders Weekly Outlook: Silver Soars While Natural Gas Crashes

Silver and copper were the leaders this week with fresh lows in the dollar with a tempering of Fed rate hike aggressiveness. Shanghai copper warehouse stocks this week fell by 7.2% at a 4-week low and LME stocks are at a 2 1/2 week low. WTI oil recovered strongly with the Russia oil Cap agreement, an OPEC+ meeting and a large storage draw. Natural gas gave us the flipside in energy, as the weakest commodity on the board with a loss in HDD days, another freeport delay and the rail strike being averted. Grains were mixed on the week, soybean meal the strongest and soybean oil the weakest.

Silver rally led the pack

December 4 – 10 2022


Commodities

Weekly Commodity Highlights

  • Bloomberg Commodities Index slipped 0.4% (up 15.4% y-t-d).
  • Spot Gold jumped 2.4% to $1,798 (down 1.7%).
  • Silver surged 6.4% to $2 (down 0.7%).
  • WTI crude rallied $3.70 to $79.98 (up 6%).
  • Gasoline fell 2.1% (up 2.3%)
  • Natural Gas sank 10.6% to $6.26 (up 68%).
  • Copper surged 6.1% (down 14%).
  • Wheat dropped 4.5% (down 1%),
  • Corn fell 3.7% (up 9%).
  • Bitcoin recovered $520 this week, or 6.2%, to $17,050 (down 63%).
Weekend December 2, 2022

Industrial Metals

Aluminum

Technical (Alcoa)

We analyze Alcoa as a surrogate to Aluminum given its high beta relationship and more liquid aspect as an investment vehicle. $AA retested the 50Wma and 50% confluence as the Chikou rebalanced. We have support below at 2/8 sphere of influence under the tenkan. confluence.

Alcoa

Copper

Highlights

  • Net spec and fund positioning in copper recently shifting from net spec and fund short to a net spec and fund long, the copper market is potentially the most overbought since April.
  • Shanghai copper warehouse stocks tightened last week, and that news is magnified by further moderating of the Chinese Covid demand threat.
  • A significant breakdown in the US dollar contributed to last week’s rally and will likely continue to contribute to the copper bull case going forward.

Technical

Copper broke to the upside out of the pennant to test the 50wma after it rebounded sharply off the tenkan but has failed three times here in the past month. The flattening Weekly Kijun acted as a magnet to close right there. Copper had been a leader in the risk on movement for commodities.

Weekly Copper Outlook
Copper Supply Crunch

Precious Metals

  • Spot Gold jumped 2.4% to $1,798 (down 1.7%).
  • Silver surged 6.4% to $2 (down 0.7%).

“Central banks bought a record 399 tonnes of gold worth around $20 billion in the third quarter of 2022, helping to lift global demand for the metal, the World Gold Council (WGC) said… Demand for gold was also strong from jewellers and buyers of gold bars and coins, the WGC said in its latest quarterly report, but exchange traded funds (ETFs) storing bullion for investors shrank… Buying by central banks in the third quarter far exceeded the previous quarterly record in data stretching back to 2000 and took their purchases for the year to September to 673 tonnes, more than the total purchases in any full year since 1967…”

November 1 – Reuters (Peter Hobson):

Technical

Gold futures after back testing the median after another rejection at the Tenkan (orange) moved towards the flat cloud and twist. Needs to get impulse off this ABC so double bottom gains more weight and it follows silver break higher. The yellow metal is consolidating after it accelerated after breaking the weekly triangle higher. Gold has bounced after support at its uptrend line since the August 2021 bottom and Kijun. To be bullish we need to stay above the triangle. Murrey Math resistance, watch Fibs & Chikou.

Gold Weekly
Gold in Perspective

Silver

Technical

Silver bounced off the bottom trend line and was energizes in the sphere of influence. Back over 50wma after spitting tenkan, now providing support after reversed. Closing under outer channel which is now resistance. Major support is 50wma and tenkan.

Silver Weekly Outlook

Lumber

Lumber prices were a leading indicator of the supply-chain problems and inflation that followed pandemic lockdowns.

Lumber futures have collapsed since high in early March giving back all of the 2021 and 2022 rally. On-the-spot wood prices have plunged, too. Pricing service Random Lengths said Friday that its framing composite index, which tracks cash sales is down from $1,334 in March, just before the Federal Reserve raised interest rates for the first time since 2018.

Lumber Futures

Grains

Wheat

Highlights

  • Russia the dominate seller in global Wheat trade last week, discounting prices to do business.
  • USDA est of Russia crop at 91 mmt but talk closer to 100 mmt. This could also increase their final exports.
  • Weekly US exports 12 mil bu. Season to date exports are 400 mil bu vs 409 last year. USDA goal including flour is 775 vs 800 ly.
  • US south plains is dry but some feel weakening La Nina could increase spring showers.
  • For 2022/23 US shows US HRW end stocks near 259 mil bu vs 360 ly. SRW 87 vs 94. HRS 124 vs 140. White 69 vs 52, US 571 vs 669.
  • Chatter US 2023 wheat crop near 1,835 and carryout near 600. HRW 220, SRW 110, HRS 150 and White 80.

Technical

Wheat closed right at the breakup level in August and 0/8 giving back up the whole October rally. Resistance is now the tenkan and the 50 and 61.8% Fibs. It had been drawn higher by the flat weekly cloud and supported by 0/8 which held. The contract keeps trying to stabilize after it continued its sharp impulsive collapse. This came about after a failure at retesting the 8/8 move and high after it spat 8/8, and the minimum target. It had completed a measured 4/8 correction off highs then broke key support at 38% then 50% and 50wma confluence in the freefall.

Wheat ETF WEAT

Full Report:

Corn

Highlights

  • Brazil weather favorable and could suggest record corn crop.
  • Argentina dry but rains could improve early in 2023.
  • Ukraine continues to ship corn at prices discount to US. USDA has not changed US December S/D from November in last 3 years.
  • USDA could lower US corn exports 100-150 mil and raise carryout the same.
  • USDA could lower ethanol us 25-50 mil bu.
  • Season to date exports near 249 mil vs 371 last year. USDA goal is 2,150 vs 2,471 ly.

Technical

Corn replicated last week’s price action failing at the Kijun and the 7/8 near the base of the weekly cloud. Earlier in the year Corn had topped out at the highest since 2012 in Chicago at +1/8 and corrected with impulse back to break the Tenkan which it swiftly did a spit of a spit after bouncing off 720, which also the price successfully retested the high from April 2021. From here we saw Tenkan fail again. Which is back where we are.

Corn Futures Outlook

Full Report:

Soybeans

Highlights

  • USDA announced 130 mt US soybeans to China.
  • Favorable Brazil weather and concern that China may not import as much soybean as USDA forecast and may buy less from US offers resistance.
  • Soyoil futures continue to slide lower. BOH is at its lowest level since October. Lower than expected EPA biofuel mandate could reduce US soyoil use 400-500 mil lbs.
  • Weekly US soybean export inspections near 63 mil bu. Season to date exports are near 778 mil bu vs 873 ly. USDA goal is 2,045 vs 2,158.
  • Liquidation of long soyoil short soymeal spreads helping soymeal futures.

Technical

Soybeans after it rejected new lows at the bottom of trendline continues to be held back at the 50wma.. The 50 wma and the tenkan are both under the Kijun providing heavy resistance. We sit near the January breakup. The weekly cloud and Murray mingle around the $14.9/bushel benchmark.

Recall beans broke down from the bull pennant framed by +4/8 and +1/8 with the Kijun unable to sustain support right at the breakout. Support at the 50wma gave way to under the futures pivot at $15/bushel benchmarks and at the close of the week was a magnet to the recovery bounce. Pressure came from futures spitting the Weekly +4/8 over $17.50/bushel three times. The market needs to rebalance that energy.

Soybeans Weekly Outlook

Full Report:

Energy

For complete Oil and Natural Gas Coverage please visit our dedicated publications ‘Around the Barrel’ and ‘Into the Vortex.’ – Weekly Analysis and Outlook for Energy Traders and Investors

WTI Weekly KnovaWave Shape
US Natural Gas KnovaWave Weekly Grid

BDI Freight Index

Baltic Dry Index Weekly


Focus on yourself and what YOU CAN INFLUENCE, set your trading plan and goals in be set for 2022.

-comment section below data-

Real Time Economic Calendar provided by Investing.com.

Subscribe and Follow

Find us at www.traderscommunity.com

Follow our contributors on Twitter @traderscom @thepitboss16 @knovawave @ClemsnideClem

Note these charts, opinons news and estimates and times are subject to change and for indication only. Trade and invest at your own risk.

Trade Smart!