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03-17-2018: That's a Lot of Sugar!

Nature was bountiful with moisture and needed conditions to benefit sugar cane crops. Unfortunately, that led to an oversupply in nations like Pakistan, India, and Brazil. Where these nations were open to subsidizing sugar farmers before, the falling price resulting from oversupply put a lot of pressure on price support programs and in most cases, the "support" was yanked out from under sugar.

One wild card is rising crude oil prices, perhaps aided by further sanctions on Russia, and encouraging the use of cane sugar to be converted to ethanol or bio-diesel fuels.

Our recent article on World Sugar is in the Archives Section below.

03-08-2018: Some Commodities We Haven't Currently Reviewed

How do we pick a commodity for review? Here are technical strength or weakness ratings for 03/07 on the other major commodities not being currently being reviewed or traded on this site. To pick the commodity for our next review, Zenith will usually refer to such a list and pick the commodity which has one of either positive highest or negative lowest scores. Commodities currently under review on our list of about 18 on this site are not shown below. It's just a way of keeping track of what else is going with other commodities.

     Kansas Wheat         96
     Cotton               96
     Soybeans             80
     Mexican Peso         48
     NASDAQ 100 Index     40
     Euro Currency        32
     Oats                 24
     Platinum             16
     Ethanol              16
     Australian Dollar     0
     Lean Hogs           -88
     Canadian Dollar     -80
     Coffee "C"          -80
     Heating Oil         -64
     Eurodollars         -56
     Live Cattle         -48
     Feeder Cattle       -48
     Swiss Franc         -24
     Rough Rice          -24
     Crude Oil           -24
The ratings are good only for date shown, and rapidly change each day, whereas we review the list only periodically. Once a commodity appears on our list of articles and is being currently traded, we consider its long-term direction has been established and trade consistently from that direction wtihout worrying about day-to-day changes. Granted, that's not how most other futures traders work nor how we trade stocks; but we have found it to be effective for commodities to trade that way.

03-16-2018: Still Struggling with Data Supplier Irregularities

Zenith's various system components for years were based upon data formats supplied by "TBSP.Com", a well-known and fairly reliable data supplier which eventually apparently went out of business under very bad management and ownership by individuals who had little or no knowledge of programming skills and began to attempt to "improve' their site with changes that were anything but "improvements." When futures options symbols underwent drastic changes, that seemed to be the demise of one of the most important and unique aspects of the data they supplied, along with increasing costs from greedy exchanges like ICE. "TBSP" took non-refunded annual subscribers' advance payments along with them when they went under, a final "kiss of death."

When we scrambled to find a new data supplier, all our programs and entire system had to be adjusted to accommodate a different data format. Zenith had long used a single "roll forward" method of adjusting data to be consistent with the latest forward contract, i.e. adjusting data on one day and adjusting all previous data for each month to be consistent with the data on that day, sort of like adjusting for a "stock split" so-to-speak. We thought this gave a much more accurate picture of what would really happen to a trader who "rolled forward." But it was extremely time-consuming, especially for certain contracts like say, Milk, or Energies, where a "roll forward" adjustment for the lead contract for commodities that had contracts for every motnth, would have to be done nearly once a month. So we decided to depart from our longstanding policy of using "quantum" adjustments to using "continuous contracts" instead, as these were provided by the new data supplier.

Unfortunately this, while being a great time-saver, led to new problems we did not anticipate, and now our site is rigged for continuous contract usage with a ton of new errors introduced. The first and biggest problem was the way data supplied by the ICE exchange did not conform to the normal way of doing continuous contracts, where they evidently use some sort of average of all months and their continous contract data does not conform to any month. So we did not abandon our previous system for ICE contracts, because we had no idea what in the world they were doing, but as usual it was pretty screwed up.

But another problem was that we didn't always know which month we were in with continuous contracts due to a flaw in the adjustment process by the new data supplier which is also screwball. His system is designed for people who directly use his data with no adjustments and feed that directly into their systems, whereas our system requires his data to be further adjusted to conform to our system which was laid out under TBSP format and changing it now would just be too costly.

Normally, with continuous contracts, data is adjusted when the open interest in a contract for a new month becomes the largest open interest of all the months in a one-time quantum jump. Thereafter, the continuous data sticks with that new month as the basis for the continuous contract. But our supplier evidently performs this test every day, causing big problems, because in a contract like Milk, that includes all the months, the largest open interest may be say, April, on one day, and March or May on the next, with substantial changes in price between the two. If adjustments are made daily, then the continuous contract looks okay on the data supplier's site because he alters all his data daily. Milk for a given month looks fairly bland, but if one is juming back and forth from one month to another all the time using "continuous contract data" where the lead month keeps changing daily, the data will appear to hop all over the place and give false volatility readings.

So we are currently using continuous contract data for most commodities that is supplied from a very flawed system. It works if you consistently use supplier data which changes every day not just for one day but for the entire history of a contract, but most trading systems written independently simply with their own particular data formats do not do it that way because it is just too cumbersome to revamp your entire historical data files every single day, i.e. totally impractical.

At least for milk, we may have to go back to the quantum adjustment method, and perhaps for all commodities, because our data supplier is far less reliable than our previous one when it comes to "continuous contract" data. But this will take time, and in the meantime, a lot of errors (including erroneous "current contract month" in certain data headings) have been creeping into some of our reports, and we are trying to fix them as they are detected. Continuous contract data isn't all that it is hyped up to be except for those who need to download years of data to intially set up a file (where individual commodities contracts generally do not extend into years.) Then that data is more reliable even if having been adjusted every single day, if it is only used to set up an intial file because it is consistent within itself. But for daily updates, its value is questionable, even as a "time saver.".

This is really hard to explain, but our data supplier will release an end of day (EOD) file for all commodities contracts including continuous contracts. When daily adjustments are made to his system, the end-of-day file for a previous particular date is also altered retroactively to be consistent with historical data files which are also being altered daily depending on which contract has the largest open interest and to which the "continous contract" must conform. So while consistent within itself throughout the data supplier's system, the data you get on one day may change retroactively on the following day and no longer be the same EOD file, as the one you thought you already doiwnloaded and assumed had not changed. But it did. The continuous contract data even in a single day end-of-day file for, say a week or so ago, also changed often every day, at least for the continuous contract data.. This catches many people (like us) unaware, who assume data that was reported on say, March 2nd, for continuous contract data is now "fixed," when in fact it was retroactively adjusted daily. Causes big problems for our programs!... not a good system.

Archive List

03-17-2018: May World Sugar: Oversupply

03-05-2018: May Chicago Wheat: Weather Problems

02-27-2018: May Cocoa: Return to Normal

02-18-2018: June U.S. Dollar Index: Interest Rate Differentials Hurt

02-11-2018: March Soybean Oil: Burdensome Supply

02-07-2018: March Treasury Bonds: Higher Interest Rates Coming

02-01-2018: March Japanese Yen: Switching to Inflation

01-26-2018: April Gold: Inverse to the U.S. Dollar

01-18-2018: March British Pound: Minimizing Brexit Effects

01-12-2018: February Gasoline: Follows Crude Higher

01-08-2018: March Lumber: Wildfires, Hurricanes, and Tariffs

12-21-2017: March Treasury Notes: Tax Cuts Impact

12-17-2017: March Palladium: Out of Whack with Platinum

12-13-2017: February Natural Gas: Pressure from Alternate Power

12-08-2017: March Silver: Not Ready for Runaway Inflation

12-02-2017: March Soybean Meal: Choppy Trade

11-25-2017: December Hi-Grade Copper: Slowly Trending Higher

11-22-2017: December Australian Dollar: Poor Yield

11-20-2017: December Milk: News Mainly Cyclical


Updated once a week (usually on Saturdays) unless the preceding week had less than five trading days.
Buy and sell prices are averaged where multiple contracts are involved, which is why they may not fall on an exchange tick increment.

All Commodities Trades 01/02/2018 - 03/17/2018:

 # Commodity           BS    Buy   Sell   Last    Gain Intended  Rough   Group
                                                 (Loss)    Risk Percent

20 May Soybean Oil      S         32.24  31.98 $  2,520  14,880  16.7% Grains  
 6 Jun British Pound    C 139.57 140.01 139.96 $  1,470  14,963  16.7% Currency
11 May Cocoa            C  24.63  25.71  25.22 $ 11,550  14,960  11.1% Softs   
13 Apr Milk Cl.III      C  14.03  14.18  15.90 $  3,510  14,820   5.5% Dairy   
 7 Jun U.S.Dollar Index S         89.59  89.80 $ -1,680  14,910  16.7% Currency
 3 Apr Gold             L 131.48        131.23 $   -840  15,000  16.7% Prec Met
 3 May Hi Grade Copper  L 309.30        310.00 $    435  14,925   5.6% Copper  
 6 Jun Japanese Yen     C  94.43  94.92  94.86 $  3,495  14,925  16.7% Currency
 4 May Lumber           C 479.30 494.00 489.10 $  6,348  14,960   5.6% Lumber  
 5 Apr Natural Gas Mini C  26.75  28.09  27.20 $  1,525  14,988   5.6% Nat Gas 
 2 Jun Palladium        C 969.90 998.00 988.50 $  5,560  15,000  16.7% Prec Met
 3 Apr Gasoline         C 186.50 196.20 196.00 $ 12,132  14,994   5.6% Energies
14 May Sugar #11 World  C  12.58  12.91  12.65 $  4,754  14,739  11.1% Softs   
 2 May Silver Mini      C  16.27  16.62  16.27 $  1,690  14,950  16.7% Prec Met
 8 May Soybean Meal     C 373.70 378.70 372.90 $  3,760  14,960  16.7% Grains  
12 Jun Treasury Notes   L 120.24        120.34 $    840  14,880  11.1% Finance 
 5 Jun Treasury Bonds   S        144.76 144.44 $  1,450  14,950  11.1% Finance 
13 May Chicago Wheat    C 488.00 496.00 467.80 $  4,810  14,950  16.7% Grains  

            Adjustment for Open Positions: -($    2,725)
Other Gains/-Losses This Reporting Period:   $  730,787 ***
 *** For Contracts Closed or Rolled Forward  __________
Total for all Trades:                        $  791,391

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Trading in commodities involves substantial risk and past performance is no guarantee of future profits.  Zenith does not sell advice nor does it manage discretionary accounts other than its own. Readers should be aware of the vested interest that all traders/brokers have in encouraging other traders to make the same transactions.  No one should follow investment advice blindly.  This web site should be used only as a "sounding board" for confirming one's own opinion.  Any suggested order placements should be reviewed and reset to fit current market conditions by individual traders.

Recommendations may include trades which have already been made on the same or a previous day, otherwise the issue is placed on a "watch list." Suggested trades are based upon an approximate maximum $15,000 capitalization requirement per trade, depending upon initial contract margin requirements.  Zenith's actual trades may be larger.  $22 per round turn for futures is deducted from profit figures.   Commodity option trade recommendations are not tracked, but performance should parallel that of the underlying commodity's.

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