Inside Insight: Positive Opportunities for Traders in 2017

January 31, 2017 9:52AM CST

Let me first start by saying that commodity prices in general have been under pressure for the better part of the last six to seven years. This was due to large supplies that were created between 2005 through 2010 while the commodity bubble was inflating to unsustainable levels. It had to burst. Huge supplies due to historically high prices led to a prolonged period of weakening demand, which we referred to as the “great recession”. The economy blew up and demand went away. That’s the market doing its job. Those are the cycles that supply and demand markets create. That’s commodity trading 101.

I think that a new cycle of bullish demand for commodities is beginning to heat up this year. First and foremost, the long-term bear market is doing its job. Lower prices result in less production, and eventually those lower prices will attract new demand. Supplies run low and then end users scramble to meet their needs. Prices will move higher. We must also consider that there is a lot of pent up enthusiasm about a “real” economic recovery. Not anything like what the last eight years have been, but real growth and expansion that will lead to undeniable inflation. That’s when you want to own commodities.

So I want to briefly identify some of the markets that I will be watching particularly closely this year: All metals (copper, silver, platinum, and gold) and the grain markets, specifically corn and soybeans. If you want to open a futures trading account, give me a call.

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This material has been prepared by a sales or trading employee or agent of RJO Futures and is, or is in the nature of, a solicitation. This material is not a research report prepared by RJO Futures Research Department. By accepting this communication, you agree that you are an experienced user of the futures markets, capable of making independent trading decisions, and agree that you are not, and will not, rely solely on this communication in making trading decisions.