Anyone here trade commodities?

[jyl]

I've been looking at some of the commodities charts. The metals like copper look like they are prime for shorting, or at least booking profits. Anyone know more about this stuff?

P.S. I am personally not at all interested in trading commodities but we (my company) owns stocks that have been driven by commodity prices, so I'm interested in commodities as a driver.

[turbo6bar]

I'm not sure if Hedgestreet has copper futures. They do have futures for gold and silver. That is the extent of my trading.

I believe we can endure high gold and silver prices, but the market will not tolerate high copper and steel prices. These costs must be passed down the chain, and this will certainly put pressure on the economy.

How can the layman trade copper?

[TyFenn]

do NOT short Copper!

at least that's my humble advice as a Commodity Broker - take it as you wish.

The Shanghai Exchange, which some consider the new leading indicator has been almost limit up for the last six days. See here:

Copper in Shanghai Rises to Record, Investors Bet on More Gains

May 15 (Bloomberg) -- Copper futures in Shanghai rose to a record for a sixth trading day as soaring prices this year have done nothing to dent investor demand. Aluminum also advanced to an all-time high.

Copper stockpiles monitored by the London Metal Exchange fell 0.3 percent last week, as makers of wire and pipes tapped inventory while supply from mines was disrupted by strikes. Investment funds are pouring money into commodities as they seek higher returns from those offered by stocks and bonds.

``From the total open interest on LME's copper futures, it looks like the funds are not leaving the market,'' Cai Luoyi, metal analyst at China International Futures (Shanghai) Co., said from Shanghai. ``The bubble's not bursting, it's just getting bigger.''

My guess is that Copper will be up in the US market.

[legion]

I know some people at the Board of Trade in Chicago. The successful commodity traders I know (mostly farm products) got into the trading side by being involved in the actual commodity first. They still "keep their eyes and ears on the ground"--they keep in close contact with actual farmers, elevator operators, etc. IMHO, there's a big difference between making a few lucky trades and knowing the business of a commodity.

[turbo6bar]

When does copper return to orbit, then? It seems to be driven purely by speculation. I don't think folks woke up March 01, 2006 and said, "egads, we're running out of copper." Do they really believe higher copper prices won't be filtered into the economy via higher inflation? Do they not believe higher inflation is the enemy of central bankers????

[legion]

There is a ton of copper (both native and ore) in the U.P. of Michigan that is not being mined because the price is still too low to make it economical. If you took that graph back to the 1930's and adjusted for inflation, you'd see something pretty interesting.

[turbo6bar]

Does the graph have enough shock value to justify a 50% increase in copper prices in 2 months?

[john70t]

Heard some snippets on the telly by Berkshire-Hathaway's(sp) Warren Buffet. He didn't like metals, but did like agriculture. Ethanol blends are likely in the future, and could bring value back to family farms(big ones) and "country livin'".
Buy low.

[TyFenn]

On a global level - yes, there is a shortage.

The market wasn't up as I expected today but then again, in the context of today's market, it wasn't bad at all.