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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:
Producer Lifts Estimate on Brazil’s Arabica Inventory: Coffee Futures
Coffee futures may be set to stabilize or rally after a two-season production downturn to drought in Brazil, but with still strong exports mean the drawdown of arabica inventories now reaching 12M bags is quite a bit more than previously expected, a major coffee producer contends. Coffee futures are trading up 55 points today settling near $1.2045 per pound at the Intercontinental Exchange.
The weaker Brazilian Real currency helped spark demand of arabica inventories creating more than usual coffee exports. The bumper exports cited the coffee producer to raise estimates to 5M bags shortfall for the forthcoming 2015-16 season.
“Coffee importers from around the world have found tangible value by Brazil’s currency creating bargain (coffee) prices,” said Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, sharing his fundamental assessment of the coffee futures market. Evans added, “As arabica coffee stocks run lower, however, less selling can be anticipated bringing Brazilian coffee exports back to their normal average.”
The trend for coffee futures remains down but with a possible bottom happening. For now, coffee futures have been the consumers best friend with low prices to be enjoyed as long as possible.
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.
Agricultural Futures at Risk with European Union Free-Trade Deal
The grain futures and livestock futures trade must be watching the US and European Union free trade deal negotiations closely as US agricultural markets are under close scrutiny from the EU agricultural commission because of GMO crops, and hormone induced beef. Grain futures are trading mixed today with the soy-complex up, and corn and wheat lower at the Chicago Board of Trade and livestock futures up across the board at the Chicago Mercantile Exchange.
This Transatlantic Trade & Investment Partnership “deal” between the US and EU has the potential to cover one-third of world trade and involve nearly one-half of global GDP, but after 11 rounds of negotiating the “food and farming” aspect of the trade deal are proving to be the most bothersome. Its specifically US exports of beef and the EU’s need to have a “designation of origin” and the fact that US foods are grown as GMO’s.
“The European Union’s doubt’s about the safety of the US’s agricultural food products are with merit,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, sharing her fundamental assessment of the agricultural futures market. Levy added, “Not enough time has passed for full inspection and longer-term evaluation of these products. Even groups here in the US are skeptical of GMO’s.”
Currently livestock futures – both beef and pork futures – are in clear downtrends with some signs of bottoming action. Grain futures – the soy-complex, corn and wheat futures – had all been in downtrends, but the soy-complex appears to be in the early stages of an emerging uptrend.
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.
Florida’s Orange Citrus Industry in Worst Shape in a Century; Orange Juice Futures
Orange juice futures have been thrusted higher over a tiny-winged Asian-insect wreaking havoc by spreading a bacteria and killing-off the trees making harvests as small as they were 50 years ago. Today orange juice futures are down $1.10 per pound currently trading at $146.75 per CWT at the Intercontinental Exchange.
The Florida Dept. of Citrus is looking ahead and they see the harvest of their prize crop dropping to 27M boxes by 2026, according to their report last month The current harvest that began last month is seen shrinking down to 74M boxes and is 24% less than a year ago and the least amount since 1964. Since this is the fourth consecutive seasonal decline in a row, this is considered the longest slump since 1913.
“The outlook for Florida’s orange juice (futures) industry isn’t looking so good with a bug spreading a virus with no known cure,” said Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, sharing his fundamental assessment of the orange juice futures market. Brady added, “The citrus industry there risks losing a severe economic impact for the state but what’s more important is their reputation and relevance.”
The trend for orange juice futures is up but with a possible top in progress. Orange juice futures is a market best left to the professionals at this time because of excess volatility.
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 Tumble as Turkish Imports Set to Rise
Cotton futures is taking a dive today despite the USDA’s official statement of Turkish cotton dropping 17% this season because of low farmer returns. Cotton futures are are down $1.13 today, currently trading at $61.70 per pound today at the Intercontinental Exchange.
The country of Turkey is the worlds second largest cotton buyer (behind China) and the lower production is reportedly going to help boost import demand by 9%, despite slack local consumption. The fall in plantings, described by the USDA Ankara bureau, is due to better perceived returns with corn in traditional cotton growing regions.
“Farmers all over the world will gravitate to the higher paying crops at any given time,” said Laura Taylor, a senior market strategist at RJO Futures in Chicago, sharing her fundamental assessment of the cotton futures market. Taylor added, “Cotton is one of the harder crops – and rightfully more traditionally profitable – but take the monetary incentive away and the next best profitable crop will be grown.”
Cotton futures trend has been yo-yoing up and down, back and forth all year long. Cotton futures is currently down with no bottom yet in sight.
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: Sugar & Cocoa (New this week.)
DOWN Trending Futures Markets: Feeder Cattle, Euro-Currency, Soymeal, 10yr. T-Notes Soybeans and Gold, Copper, Kansas Wheat, Live Cattle, British Pound & Corn (These six 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.
Africa’s Cocoa Exports Sends Cocoa Futures to New Highs
Cocoa futures rallied to new highs today not seen in four-and-a-half years as West Africa’s cocoa season is reportedly off to a great start. Cocoa futures are up 15 points today trading at $3,392 per ton at the InterContinental Exchange in London.
One of Africa’s top agriculture investment bank’s stated the strong start is to be contributed with a rise in farm gate prices encouraging farmers there to drawdown current inventories. Other conditions exist which may keep cocoa in demand since the health of the new crop has yet to be evaluated, and fears of the effect of drier weather affecting this crop.
Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, shared his fundamental view of the cocoa futures market by stating, “The African cocoa farmers held back on inventory allowing the market to rally to their desired prices for selling their product.” Medina added, “With cocoa (futures) prices at multi-year highs, with uncertain conditions ahead, this situation can now convert to a ‘weather market’ that will have to be watched.”
The trend for cocoa futures is up with no top in sight. Much resistance at current levels, but has cocoa futures have proved to be a “buy the dips” market for the past couple of months.
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: Sugar & S&P 500 Index
DOWN Trending Futures Markets: Feeder Cattle, Euro-Currency, Soymeal, 10yr. T-Notes and Crude Oil, Lean Hogs & Soybeans (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 Near Unchanged as Chinese Inventories “May Fall”
Corn futures will have much to take in as China’s corn stocks are reportedly ready to plateau or begin to fall in the next growing season of 2016-2017. Corn futures are down .01 cent today currently trading at $3.6125 at the Chicago Board of Trade.
The USDA’s Beijing bureau reports that after six continuous years of corn inventory increases that there is the “potential” for a forthcoming decline after a subsidy cut for farmers announced this past September. Plus, the Chinese government is enhancing sweeteners to users as a way to help eliminate its large corn inventories.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his fundamental view of the corn futures market by stating, “The demand for corn in China is real, however, too many farmers tending to this one crop has made the government there cut subsidies which is sounding the alarm for future lower stocks.” Craney added, “The Chinese government may get more involved as I understand even after the lowered floor price, corn is still more profitable than other popular crops.”
Corn futures trend is down but may be finding a support level at these current prices. The $3.60 cent level of support for corn futures has held for a good part of this year.
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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