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Schad Commodity Blog & Commentary
This commentary is intended to provide unique insights with my 20+ years experience for the commodity futures markets we use in our everyday lives and is recognized, and has been selected, by Feedspot as one of the the Top 20 Futures Trading Blogs on the web. Schad Commodity views & opinion only. For additional commentary, and to assure you’re receiving the Schad Commodity Daily Report, be sure to connect on Facebook® & Twitter®.
From the desk of Brian Schad:
Coffee Futures Rally Helped by Brazilian Real
Coffee futures (arabica) have reached 14-month highs this week with the help of an unexpected ally – the Brazilian Real – despite the production outlook of the robusta variety. Coffee futures are up 310 points today currently trading at $1.5075 per pound at the New York Intercontinental Exchange.
With the combination of dryness in the coffee growing regions in Brazil & Vietnam, and the Brazilian Real reaching its strongest level against the US Dollar, the last month and a half has cause arabica coffee futures to rise 20% versus an 8.7% gain in robusta variety futures. Last month alone, a composite index maintained by the Int’l Coffee Organization showed arabica coffee gaining 7.2% which is three times the gain compared to robusta coffee.
“It is currently a tale of two different coffee (futures) varieties traded ‘across the pond’ from one another,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, sharing her fundamental assessment of the coffee futures market. Levy added, “Both coffee varieties have their problems right now, but the prolonged drought in the arabica growing regions are outweighing the production shortages of the robusta type.”
Coffee futures trend is up with no top yet in sight. Right now coffee futures appears to be a “buy the dip” market.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
“Higher Prices Here to Stay” for Sugar Futures?
Sugar futures are on the march higher from last summer’s lows and since April when an industry expert helped propel the market higher when it was claimed “sugar prices are here to stay” because of a current world deficit. Sugar futures, however, are down 30 points today currently trading at $0.1942 per pound at the New York Intercontinental Exchange.
It is reportedly estimated that more than 22M tons of inventories over two growing seasons have been removed from supplies, and now the experts have once again altered the forecast for the world sugar production shortfall by another 1.1M tons. Much of this downward revision said to be due to droughts in both Central Europe and India.
“It appears that no matter what the combined two sugar growing seasons produce, sugar stocks will withdrawn by more than 22 million tons,” said Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, sharing his fundamental assessment of the sugar futures market. Brady added, “With this being the case for sugar (futures), stand-by for volatility ahead.”
The technical trend for sugar futures is “up” with a possible top in sight made in the last trading sessions in June. Sugar futures still “appear” strong, however some type of pullback is expected in this market given the recent gains it has made this past spring and early summer.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
Cocoa Futures Said to Offer Buying Opportunity from Brexit
Cocoa futures are up for the month with possibly more gains to follow if veteran soft commodities analyst Judith Ganes-Chase’s assessment is correct. Cocoa futures are up 11 points today currently trading at $3,112 per ton at the New York Intercontinental Exchange.
Ms. Ganes-Chase has uncovered a skew between the British Pound and the Sterling denominated currency after the Brexit two weeks ago, and that is since the collapse of the Pound, Sterling denominated cocoa futures have prospered. Cocoa futures have gained 15% since the Brexit vote two weeks ago.
“The collapse in (the British Pound) is not the only reason for investors to buy cocoa,” said Judith Ganes-Chase, founder & president of J.Ganes Consulting, LLC in New York City, sharing her fundamental assessment of the cocoa futures market. Ganes added referring to the delays in deliveries of cocoa beans to Ivory Coast ports (the top cocoa producing country), “Casting the currency aside, worries over slowing arrivals remain the fundamental talking point.”
Cocoa futures trend is at a crossroad in consolidation for the past four months. Cocoa futures can trend up on a sustained rally over $3,150, or resume lower on a breakout below $2,950 – so let the market tell you what it wants to do…
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
Schad Commodity’s Weekend Report: An Insider’s View of the Next Big Market Move
Once each week, usually on Friday evenings, we update our personal weekly commodity trading charts and review them for changes in “net long” or, “net short” holdings between the big commercial commodity traders, large speculators, and the usually uninformed public. This is our professional analysis of “the bigger picture” and current dynamics for each market which provide a spyglass view of the BIG commercial traders and what they are currently doing to influence the futures markets.
As you may already know, insider trading with stocks on Wall Street is very illegal. However, in the commodity trading industry, large/commercial traders MUST report their positions EACH WEEK to the CFTC regulatory body, hence, we monitor them on a weekly basis. Although the futures markets themselves will ultimately provide the most accurate illustration of trend, these (weekly) charts we’ve identified, serve to forewarn us of the next possible bigger move.
Here are the commodity markets which illustrate their bigger changing picture:
UP Trending Futures Markets: Sugar, Cotton, Gold, Silver, Coffee, Natural Gas, 10-yr. T-Notes and Japanese Yen (New this week.)
DOWN Trending Futures Markets: Feeder Cattle, Soy Oil and Euro-currency
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
With La Nina Concerns Aside, Soybean Futures Extend Losses
Soybean futures continue to spiral lower losing more than 10% this week (so far) as La Nina probabilities subside with favorable weather prospects, prompting holders of long positions to scramble. Soybean futures are down over .50 cents today currently trading at $10.23 per bushel at the Chicago Board of Trade.
Assisting the liquidation of long positions of both futures & options were also key support levels taken out over the past three to four weeks causing soybeans to drop about 5% alone. Today marks the first close below the 10-week moving average for soybeans since early March.
“We’re seeing the typical hesitation to buy, rush to sell mode by traders when weather is involved,” said Laura Taylor, a senior market strategist at RJO Futures in Chicago, sharing her fundamental assessment of the soybean futures market. Taylor added, “But don’t rule out La Nina just yet because the weatherman is saying it could be delayed until September.”
The trend for soybean futures is “down” (in my study of daily charts) as of today’s .50 cent move lower. Before hoping aboard the soybean futures sinking ship, I would consider a technical bounce higher and utilizing soybean options as a hedge.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
Cotton Futures Sideways as Price Forecast Updated & Inventory Outlook Cut
Cotton futures have been “coiling” in price the last couple of weeks even as the Int’l Cotton Advisory Committee (“ICAC”) boosted hopes for the price outlook due to less production. Cotton futures are down $0.03 cents today currently trading at $65.18 per pound at the New York Intercontinental Exchange.
The ICAC determined by the “Cotlook A Index” that global cotton prices for 2016-17 will be boosted by .02 cents a pound to an average .72 cents per pound – compared to last season’s average of .70/lbs. Part of this rise in cotton prices is due to a 5% reduction (year-to-year) in global cotton stocks by 200T tons.
“Much cotton (futures) information to digest as even China is reportedly importing 8% less in the foreseeable future due to their governmental efforts to reduce the inventory of cotton there,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, sharing his fundamental assessment of the cotton futures market. Craney added, “Imports outside of China are said to increase by 3%, however.”
Cotton futures trend is “up” technically, however, more at a stand still for the past month. A breakout with two consecutive closes above 65.50 could extend the rally, but sustained trading below the 64.50 level could change the trend in this mixed signals cotton futures market.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
Schad Commodity’s Weekend Report: An Insider’s View of the Next Big Market Move
Once each week, usually on Friday evenings, we update our personal weekly commodity trading charts and review them for changes in “net long” or, “net short” holdings between the big commercial commodity traders, large speculators, and the usually uninformed public. This is our professional analysis of “the bigger picture” and current dynamics for each market which provide a spyglass view of the BIG commercial traders and what they are currently doing to influence the futures markets.
As you may already know, insider trading with stocks on Wall Street is very illegal. However, in the commodity trading industry, large/commercial traders MUST report their positions EACH WEEK to the CFTC regulatory body, hence, we monitor them on a weekly basis. Although the futures markets themselves will ultimately provide the most accurate illustration of trend, these (weekly) charts we’ve identified, serve to forewarn us of the next possible bigger move.
Here are the commodity markets which illustrate their bigger changing picture:
UP Trending Futures Markets: Soymeal, Sugar, Soybeans, Cotton, Gold, Silver, Coffee and Natural Gas & 10-yr. T-Notes (Both new this week.)
DOWN Trending Futures Markets: Feeder Cattle, Soy Oil, CBT Wheat and Euro-currency (New this week.)
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
Expert Believes We Will See $10 a Barrel Crude Oil Futures
Crude oil futures have resumed lower today as one expert consultant has published his belief oil is still heading down to the $10 level because of a world “awash in crude.” Crude oil futures are down $1.18 today currently trading at $48.70 per barrel at the New York Mercantile Exchange.
This professional consultant feels recent gains since the February low isn’t justified with the outlook of crude oil that collapse the energy market in the first place – such as the wildfires near the oil sands region of Canada, cuts in output by politically unstable countries such as Nigeria & Venezuela, or even the hopes of American fracking efforts subsiding all played a part of this recent oil price surge. In the meantime, the Persian Gulf allies and the Saudi’s have been playing a futile game of bluffing with the world’s other major oil producers.
“But the world continues to be awash in crude, and American frackers have replaced the Organization of Petroleum Exporting Countries as the world’s swing producers. The once-feared oil cartel is, to my mind, pretty much finished as an effective price enforcer,” said A .Gary Shilling, president of his namesake’s New Jersey-based consultation firm, sharing his fundamental assessment of the crude oil futures market. Shilling added, “Even OPEC’s leader, Saudi Arabia, is acknowledging the new reality by quashing recent attempts to freeze (crude oil) output, borrowing from banks and preparing to sell a stake in its Aramco oil company as it tries to find new sources of non-oil revenue.”
The technical trend for crude oil futures has recently rolled over back “down” with lower-highs and lower-lows that have followed the June 9th highs. I believe only sustained crude oil futures trading above $52/barrel can change the trend back up near-term.
ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF LOSS IN TRADING COMMODITY INTERESTS CAN BE SUBSTANTIAL. YOU SHOULD THEREFORE CONSIDER WHETHER SUCH TRADING IS SUITABLE FOR YOU IN LIGHT OF YOUR FINANCIAL CONDITION.
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