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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:
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: Sugar, Cocoa, S&P 500 Index & Soy Oil (Both new this week.)
DOWN Trending Futures Markets: Feeder Cattle, Soymeal, Gold, and Crude Oil, Kansas Wheat, and Live Cattle (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.
Wheat Futures Higher Despite French Winter Wheat Plantings
Wheat futures are higher today (after the USDA crop production report) despite French farmers ramping up planting in the biggest area since 1936 – this after an all-time high bumper crop. Wheat futures ended the day up nearly .09 cents trading at $4.905 at the Chicago Board of Trade.
The French Agricultural Ministry reportedly stated that winter wheat sowing’s area had increased “in most French regions, and especially in the Loire Valley,” which is said to have increased by almost 5%. The increase of wheat plantings come at a time when the European Union was expecting a slight drop due to the popularity of the grain.
“If the French wheat forecast is correct, then another all-time bumper crop can be expected next year,” said Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, sharing his fundamental assessment of the wheat futures market. Medina added, “Apparently the wheat used to make pasta is the favored variety.”
The trend for wheat futures is down, albeit sideways for the past four months with little direction. The time is right with wheat futures weakness for food processors to take a look at the bigger picture for marketing their products.
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.
Decreased Incomes May Make it Difficult for Farmers to Hold Back Supply: Grain & Livestock Futures
Grain and livestock futures may find even lower prices ahead as falling incomes here in the US may make it difficult for producers to retain much of their stocks in order to await grain & livestock prices to recover from these current low levels. Grain futures are anywhere between “unchanged” to down .06 cents trading today at the Chicago Board of Trade.
The USDA stated last month that due to weaker crop and livestock prices, domestic farm incomes are expected to drop this year to a 13-year low. If that’s not enough, our strong US Dollar and plentiful global supplies have also dragged down world food prices – reportedly 18% lower prices than last year at this time.
“Farmers and ranchers usually hold back a percentage of their supply when commodity (futures) prices are low as we have seen lately,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, sharing his fundamental assessment of the grain futures market. Craney added, “When you take into account, however, the incomes of producers which are expected to be limited, it may be difficult for them to hold back from selling to get all they can to pay their bills.”
Grain and livestock futures trends are mainly down (only soybean futures have turned up recently) with no bottom yet in sight. Grain & livestock futures can see technical rallies in markets like this, but with incomes down across the land, prices for consumers should continue to fall at the grocery stores.
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 and S&P 500 Index & Soy Oil (Both new this week.)
DOWN Trending Futures Markets: Feeder Cattle, Euro-Currency, Soymeal, Gold, British Pound, and Corn
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 Only Budge After Supply Fall
Natural gas futures data shows domestic natural gas supplies have fallen for the first time this season, but are little changed after the announcement. Natural gas futures are up 16 points currently trading at $2.181 per BTU at the New York Mercantile Exchange.
There was an expectation for a 51B cubic-feet decline in supplies, but the US Energy Information Administration stated in its weekly report that domestic natural gas inventories actually fell by 53B cubic-feet in the week ending last Friday (Nov 27). The five year average for the week is actually a set-back of 50B cubic feet.
“The natural gas storage drawdown is merely a little more than usual,” said Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, sharing his fundamental assessment of the natural gas futures market. Plotkin added, “The natural gas trade, I suspect, will be monitoring for a pattern of more than usual or unexpected set-backs in supply to possibly turn this market around.”
Natural gas futures are in a down-trend with new lows being made just today – so no bottom in sight. Natural gas consumers can enjoy these low prices, but for how long nobody can say for sure.
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.
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.
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