The Official Brian Schad Commodity Futures
& Options Trading Corporation Website
Commitment to Trading Excellence
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:
Sugar Futures May be Overcompensating for Perceived Brazil Output
Sugar futures, in the early stages of a new downtrend, may be “too optimistic” about Brazil’s rise of sugar production in the next season says one industry analyst. Sugar futures are down five live today currently trading at $0.1315 per pound at the Intercontinental Exchange
The production of sugar is indeed set to rise next season in Brazil’s South Center region, but not as much as others are forecasting because sugar mills there are reportedly approaching their maximum capacity. Estimates for sugar production in the sugar growing region in Brazil is expected to be 33M tons on the lower end, and as much as 34.5M on the higher estimate.
“These estimates for sugar from analysts & economists sometimes do not take into consideration process capacity, breakdowns of equipment, rain delays, strikes from employees (like we saw just late last year), maintenance stoppages,” said Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, sharing his fundamental assessment of the sugar futures market. Brady added, “There could be as much as 15% non-usage for a sugar mill due to unforeseen circumstances.”
The technical trend for sugar is “down” as of late last month. Solid support for sugar futures prices comes in at .11 cents 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.
Can Food Prices Be Expected to Drop with Crude Oil Futures?
Crude oil prices are dropping back to pre-war levels and if you may recall, food prices have soared over the years with the primary blame being attributed to higher delivery costs…but now times are again a changing. Crude oil futures are down. 44 cents currently trading at $29.00 per barrel at the New York Mercantile Exchange.
A United Nations Food & Agriculture Organization study took monthly data of oil and food prices and determined a higher ratio of food cost since the year 2000 than the prior decade which can only be because of increasing oil costs. Since 2014, however, there has been a disconnect as food prices have been outperforming the cost of oil, but at the same time allowing more food production.
Laura Taylor, a senior market strategist at RJO Futures in Chicago, shared her fundamental view of the crude oil futures market by stating, “There was a lag in higher food costs when crude oil (futures) began its ascent over a decade ago. Now that crude oil prices are returning to pre-war levels, maybe food companies are compensating for their prior losses before food prices come back to more affordable levels.” Taylor added, “With increased food production (with lower energy costs), companies can be compensated earlier with more available product so there is a possibility of higher food costs not lasting that much longer.”
Crude oil futures trend is down with no bottom yet in sight. The technical indicators used to measure strength in the crude oil market illustrate the high probability of lower prices ahead – a major plus for consumers.
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: EuroFx & Japanese Yen (Both new this week.)
DOWN Trending Futures Markets: Soymeal, British Pound, Cocoa, Cotton, Kansas Wheat and Crude Oil, Live Cattle, Sugar, Corn & CBT Wheat (These five 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.
Gold Futures Spike to One-Year Highs on Global Uncertainty
The gold rush is on as gold futures spiked to a high of $1,263.90 in early morning trade with fears of global financial instability due to a tumbling stock market, a lower US Dollar, and little yield in US Treasury Bonds. Gold futures remain up $50 per ounce at this time currently trading at $1,244.60 at the New York Commodity Exchange.
The spike in the precious metal began in the early morning hours with talk of European bank’s shares plummeting to multi-year lows and the concerns of how banks are to profit in a low-growth and low interest-rate outlook. The chairwoman from the Federal Reserve added to the gold rush euphoria when she made comments supporting a slower pace of future rate increases.
Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, shared his fundamental view of the gold futures market by stating, “The gold (futures) market may be foretelling of an economy to come. Last year gold dropped based on a decent performance, but with the events of other markets so far this year – not so much.” Medina added, “Gold (futures) will naturally rally when there are such worries about our domestic economy and how that will ripple across foreign economies.”
The trend for gold futures is up with no top in sight. Gold futures has turned into a professional’s market with very wide swings happening, so future buyers should be looking for dips.
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.
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.
Recent Comments