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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:
Hog Futures Resume Sell-Off With Pork Producers Facing Losses
Hog futures continues its retreat down for the ninth out of eleven trading sessions as news is learned that reportedly domestic hog producers are poised for a minimum of six months of operating in the red. Hog futures are down $0.60 per cwt today currently trading at $83.375 per pound at the Chicago Mercantile Exchange.
“Breakeven” may be the best hope for hog producers in the second quarter next year if a University of Illinois professor is correct on his assessment. He believes animal prices per head will fall from an $8 profit to a $19 loss taking into consideration feed prices follow the expectations of the current futures prices curve – and this doesn’t take into account any interruption in the world economy following the Brexit situation.
“If Brexit does slow world income growth, that could be negative for global sales of pork and other US agricultural products,” said Chris Hurt, professor at the University of Illinois, sharing his fundamental assessment of the hog futures market. Hurt added, “Brexit gives our biggest global pork competitor a sizable and immediate price advantage.”
Hog futures trend has only recently turned “down” from the $90+ highs only two weeks ago. I would expect some type of bounce in the hog futures market in the next week, but if Professor Hurt is correct on his assessment, we may see a longer-term downtrend ahead.
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.
Can “Brexit” Be the Start of a Major Gold Futures Bull Market?
Gold futures have retreated about one-half from their Brexit highs last Friday, but one gold veteran with more than 20 years in the industry claims last week’s move may be the very start of a forthcoming major bull market for the precious metal. Gold futures are down $6.30 per ounce today currently trading at $1,318.40 per ounce at the Commodity Exchange in NYC.
The Aussie mining-boss – Jake Klein – believes investors are returning to the market with the rise of so much uncertainty and volatility because gold provides an “alternative currency.” Late last week gold soared over $100 per ounce after the United Kingdom voted for nationalism (versus “globalism”) and investors seeking a safe haven with financial uncertainty abound.
“I guess to me, the most interesting thing is: are we seeing the first fault lines of a major correction and change in the financial and political systems?,” asked Jake Klein, head of Australia’s second-biggest gold producing venture Evolution Mining Ltd., sharing his fundamental assessment of the gold futures market. Klein added, “If that’s the case, then we could very well be at the early stages of a major bull market.”
The trend for gold futures is up with no top yet in sight. For those that didn’t want to take a chance at last week’s direction for gold futures, I believe we’re seeing a correction in the market possible to even lower levels.
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 the changing bigger picture for them:
UP Trending Futures Markets: Soymeal, Sugar, Soybeans, Cotton, Eurodollars, Gold, Silver and Coffee
DOWN Trending Futures Markets: High-Grade Copper, Feeder Cattle and Kansas Wheat, Soy Oil & CBT Wheat (These three 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.
Corn Futures Extend Retreat Amid Favorable Weather Conditions
Corn futures have seen their sixth down day in the last seven sessions with prices slumping nearly .60c a bushel since only last week as weather concerns have subsided. Corn futures are down .055c today currently trading at $3.985 per bushel at the Chicago Board of Trade.
The USDA provided a better than expected report in their weekly corn crop ratings earlier this week and even adding no significant damage yet to be seen as harvest is well underway. Now that the weather prospects are becoming more favorable, the chances of corn becoming stressed before its pollination period is subsiding.
“We have all been following the (corn futures) crop weather story closely,” said Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, sharing his fundamental assessment of the corn futures market. Plotkin added, “All the areas we were concerned with for dryness appears to have cooler and wetter weather ahead, and the (corn futures) market is reflecting this development.”
Corn futures technical trend remains “up” even after this recent fallout. However, if corn futures were to take out today’s low, it could possibly change the trend downward.
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.
Cattle Futures at Contract Lows, Once Again
Cattle futures prices have sunk $10 within a two week period this month amid ample beef supplies and sporadic demand. Cattle futures have bounced higher a second day, albeit up .20c currently trading near $115.25 per cwt at the Chicago Mercantile Exchange.
Beef prices for both cattle contracts (“live cattle futures” – animals ready for market, and “feeder cattle futures” – animals transitioning from pasture to feedlot for fattening) are equally under selling scrutiny because of much overall supplies with only sluggish domestic demand and exports. The outlook ahead is expected to reveal even more animals working their way to feedlots for near-term marketing.
Danielle Bourbeau, a commodity broker for Capital Trading Group in Chicago, shared her fundamental view of the cattle futures markets by stating, “The cattle (futures) market appears to be at a major crossroad with near-term direction.” Bourbeau adds, “The sudden drop in feed prices recently has helped support cattle futures only little.”
The trend in cattle futures is down with lower lows made Monday, late April, & mid-December, so a possible bottom could be near, or a major breakout lower may be right around the corner. Cattle futures prices, although at multi-year lows, are still historically high well over $1.00 per pound.
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.
Rally in Commodity Futures Markets ‘Still in Early Stages,’ Says Leading Expert
Last week leading commodity futures trading analyst David Hightower told the Agrimoney Investment Forum that this current rally in the overall agricultural markets are still in their early stages due to demand coming from emerging countries. Overall, all grain futures and livestock markets are in up-trends at the Chicago Board of Trade and the Chicago Mercantile Exchange, except for cattle futures.
Hightower believes the costs of commodity production have been suppressed for the last six months to a year and can’t be kept down much longer. Even though the commodities index has risen over 12% this year, he claims they remain well below historic highs.
David Hightower, founder of the influential “Hightower Report” from Chicago, shared his fundamental view of the agricultural futures markets by stating, “We are much closer to the bottom for commodity prices than to a high.” Hightower adds, “If you think you have missed the commodities move – think again.”
After reaching significant highs earlier in the month, agricultural commodity futures have pulled-back significantly enough to start looking for entry signals to the buy side for at least a test of recent highs. Cattle futures, however, continue to trend in the opposite position while hog futures recently extended their gains.
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 Trading 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 the changing bigger picture for them:
UP Trending Futures Markets: Soymeal, Sugar, Soybeans, Corn, Russell 200 Index, Cotton, Lean Hogs, Natural Gas, CBT Wheat and Eurodollars, Gold, Silver & Coffee (These four new this week.)
DOWN Trending Futures Markets: High-Grade Copper & Feeder Cattle
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.
Wheat Futures Plummet as Australian Wheat Crop Lifts to Four-Year High
Wheat futures continue their $0.50 cent sell-off from the June 8th $5.24 high as the outlook of Australia’s wheat harvest rising further than expected to a four-year high hits the news. Wheat futures are currently “down” .035c per bushel today currently trading at $4.74 per ton at the Chicago Board of Trade.
The world’s top wheat exporter in the southern hemisphere is said to produce nearly 25.4M tons of wheat for the 2016-17 season – an upgrade of 880T tons from a previous forecast in March. If it comes to be, this will be the most Australia has produced since 2012 when drought plagued the continent.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her fundamental view of the wheat futures market by stating, “This recent wheat production estimation is a significant improvement of well over 1.0M tons over last year’s harvest.” Levy adds, “The pendulum has swung the other way in terms of favorable weather having only heard news of drought and dryer than normal weather in past few years regarding their wheat growing conditions.”
Wheat futures current trend is still technically “up.” However, if we have a couple more wheat futures trading sessions below the $4.86 price threshold, then we could be rolling over to down into the northern hemisphere’s harvest period.
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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