What trading strategy do prop traders in commodities use?

from my understanding Commodity trading advisors and managed futures usually have black box (Alpha generating) systems. They also do a lot of technical analysis, id say about 50% of the time.

In energy trading, we do a lot of fundamental analysis. Weather reports, political/regulatory analysis, pipeline outages, plant outages, interviewing companies in the industry, etc. This is particularly important for the shorter-term physical products.

In gold we trade quite a lot of options, both exchange traded and otc. Generally less interested in supply fundamentals, more interested in demand fundamentals, macroeconomics and FX. Some traders trade very frequently, some not frequently at all. Some play the delta, others the vega, some sell theta while others bet on lease rates, some play the surface term structure, others the skew, some trade relative value while others trade relative vol. Some just scalp. Some use different approaches or combinations of approaches depending on the circumstances.

good summary nauru

Most of the commodity traders I know trade the curve aka calendar spreads. Therefore, they will butterflies, condors, contago/backwardated bets, etc. Trading flat price is actually done by very few traders anymore.

A lot of the traders on my desk would use a combination of technical analysis and reports on weather, headline news etc. Sometimes they would trade of the trends in equities and FX and relative commodities. Some traders would use roll yield in a backwardated market. The traders also used to look for prices that had the support from several technical indicators.