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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:
Optimistic Estimate for Argentine Production Lowers Corn Futures
Corn futures seem to lack any strength with plentiful global supplies and now a new report out of Argentina suggesting its going to be another boom year for corn production there. Corn futures ended the day down three-quarters of one cent to just above $3.60 per bushel at the Chicago Board of Trade today.
Today the USDA raised its official estimate for Argentine corn production for their 2015-2016 harvest by an additional 1.4M tons (to 27M tons total) equal to last years record bumper-crop. Included in this estimate is the reported additional 200K acres of corn seeding encouraged by the government.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his fundamental view of the corn futures market by stating, “I understand the Argentine government helped to improve corn profitability for their farmers there by eliminating taxes on corn exports.” Craney added, “This is a major hand-up for grain farmers there with this kind of incentive.”
Corn futures trend has been a roller-coaster since last summer trading above and below its 18-day moving average for a few weeks at a time. Corn futures are at a crossroads at this time in the middle of its .25 cent trading range.
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 Lower with Increased Acreage for Planting
Cotton futures traders have more data to work with as domestic sowings are reportedly rebounding from 22-year lows as farmers shift away from grains. Cotton futures are down 65 points today currently trading at .5895 per pound at the New York Intercontinental Exchange.
The shift from grains to cotton some industry experts believe will not be significant as only the plantings are set to increase by 6.2% from the 2015 harvest. Most of the extra cotton plants are said be to in Texas – the largest US cotton growing state – with saturated fields that are ready for sowing following flooding last year.
Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, shared his fundamental view of the cotton futures market by stating, “Farmers are seeking the very best value for their acreage, time, and effort and cotton appears to have prime fields awaking sowings in Texas.” Plotkin added, “Cotton value has held up better than other grains compared to price levels only one year ago so the economics make sense to the farmer.”
The trend for cotton futures is down with no bottom yet in sight. Major support for cotton futures should be coming in soon, however, near the .58 cent level which is last year’s low near the end of January 2015.
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 · February 5-8, 2016
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: 10yr. T-Notes
DOWN Trending Futures Markets: Soymeal, Russell 2000 Index, British Pound, Cocoa, Cotton & Kansas Wheat (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.
El Nino Drought in South Africa Bringing Record Grain Imports
Grain markets are reacting to one the worst droughts on record in South Africa causing a reported 25% slump in corn and wheat grain output this year. Grain futures – both corn & wheat – are both trading down today at the Chicago Board of Trade.
The USDA bureau in the northern part of the country has now determined a 3.0M ton estimate for the country’s corn import for the year starting in May – twice the amount of a prior estimation. For wheat, a record 2.0M ton amount of wheat is said to be imported for the same year.
Danielle Bourbeau, a commodity broker for Capital Trading Group in Chicago, shared her fundamental view of the grain futures market by stating, “What is happening at the southern tip around the other side of the world is proof of El Nino’s global outreach.” Bourbeau added, “Here in the Northern Hemisphere we are seeing much wet weather, however on the opposite side of the globe the hot and dry conditions are making crop prospects very much unfavorable.”
Corn and wheat futures trends may be technically “up” at this time, but sideways would be a more accurate way to look at their daily trend. If other places in the Southern Hemisphere are experiencing similar hot & dry weather, then many countries may be doing their grain futures market shopping right here in the USA – we have plenty to provide.
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.
Soybean Futures at a Standstill as Argentine Farmers Defy Selling Expectations
Soybean futures have much global inventory to unload, but in Argentina there is a reported 12M ton supply that isn’t exactly flying off the selves because farmers there are holding out. Soybean futures are down .11 cents today currently trading just above $8.75 per bushel at the Chicago Board of Trade.
Argentine farmers are said to be reluctant to sell down their soybean stocks as they were reportedly built up in the first place as a hedge against the possibility of their currency’s peso downfall. Recently the peso crashed by more than a third versus the US Dollar in one day, and has been on a more controlled decline since.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her fundamental view of the soybean futures market by stating, “The soybean exports and selling from Argentina has defied expectations because of such a large stockpile there.” Levy added, “The soybean (futures) trade has been looking for direction for some time now and this situation in South America adds more uncertainty to the overall outlook.”
Soybean futures trend – although technically “up” at this time – has actually been sideways in nature since late August. I have to believe at these soybean futures discount prices that nations are seeking out good trade value because we’re coming up on the time of year we should see soybeans rally.
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.
Egypt Clamping Down on Grain Deliveries Puts Pressure on Wheat Futures
Wheat futures did an about-face downward today after it was revealed the country of Egypt – the world’s top wheat importer – is refusing grain shipments with a “zero-tolerance” policy over a fungal residue that causes hallucinations if ingested in sufficient quantities. Wheat futures ended the day mixed near unchanged after rallying .07 cents above the open at both the Chicago & Kansas City Board of Trade today.
“Ergot,” a common infection found in grains, has been declared an enemy of the Egyptian agricultural authorities refusing to accept grain shipments with even a trace amount. This is a change in Egyptian policy when previously it would accept reportedly ergot levels up to one-twentieth of 1%.
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, shared his fundamental view of the wheat futures market by stating, “Its bad enough the wheat (futures) market has been trading sideways for the past two-and-a-half months. Now the wheat trade may need some kind of clarification on grain’s export rules.” Brady added, “This can potentially keep the wheat (futures) market trading sideways for an undefined prolong period of time.”
The trend in wheat futures is technically “up” at this time after finding a low only this time last month at the $4.56/bushel area. These low wheat futures prices bode well for consumers all over the world, but they low prices unfortunately don’t last forever…
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: Natural Gas, Japanese Yen and 10yr. T-Notes (New this week.)
DOWN Trending Futures Markets: Soymeal, Russell 2000 Index, British Pound, Cocoa and Cotton & Copper (Both 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.
Natural Gas Futures Find Support After Domestic Storage Data
Natural gas futures may have finally found solid support as freezing temperatures across parts of the country have boosted demand. Natural gas futures are up almost one-half cent today currently trading at $2.205 per BTU at the New York Mercantile Exchange.
Today the US Energy Information Administration announced natural gas storage in the week ending last Friday declined by 211B cubic feet – compared to expectations of only 207B. This is reportedly the biggest drop in natural gas storage since February of last year.
“The big question for natural gas (futures) now is how is the weather forecasted to behave next, followed by where is the real support for this market?” said Laura Taylor, a senior market strategist at RJO Futures in Chicago, sharing her fundamental assessment of the natural gas futures market. Taylor added, “The natural gas trade had been dropping to the lowest prices ever and this technical bounce higher puts the trade at a crossroad.”
Natural gas futures appear to be in an early phase of a possible uptrend. However, consumers can be confident natural gas futures may require more fundamental changes to reverse and sustain higher – still too early to tell.
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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