Tuesday’s Top Commodity Trades for 2020

Go KC!  

No, not the Kansas City Chiefs (who are #1 in the West) but /KC Coffee Futures, which are number one for our readers with a big $15,000 per contract gain at $142 - up from our September 25th entry at $100.  The lowest we dipped was $95.80, back in mid-October (/KCH20 is +$3 to the front-month chart) – staying just above our $95 stop line for the whole run and finally blasting off this month, well past our $122 goal.  At the time, I said in the Morning Report:

There's no ETF for Orange Juice but there is for Coffee (/KC) and we always love it below $100 and /KCH20 (March) is down to $102 and that makes for a fun play but you have to be willing to Double Down at $98 to average 2x at $100 with a stop at $95, which would be a loss of $375 per $1 or $1,875 per contract. So the risk is $3,750 but the reward, even at just $122 would be $7,500 on a single contract and /KC has been very good to us for two years now.

So, if the instructions were followed correctly, that's at least 2 contracts that are up $42 each for over $30,000 in gains in 3 months against a $3,750 risk – not bad for a quick commodity trade, right?  For those who are future-challenged, we also had a trade idea for the Coffee ETF (JO) as follows:

Coffee does have an ETF (JO) and, like SOYB above, we can pick up a spread that can give us a nice return. We think $100 (though it can dip below) is a good floor for Coffee as it's a point below which the farmers simply can't make money selling it. For the ETF, which is at $32.50, we can do the following spread:

  • Sell 5 JO March

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