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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:
Agricultural Marketer Claims Now Is Not the Time to be Selling Wheat (Futures)
Wheat futures have rallied just over .20 cents from Monday’s monthly lows, but that’s peanuts compared to the unexpected $1.27 drop in wheat prices from the June 30th high. Wheat futures are up a nickel currently trading at $5.07 per bushel at the Chicago Board of Trade.
Despite last month’s sell-off, a Midwestern agricultural marketing strategist claims there are a couple of more rallies to come especially now that the cutting of the hard-red variety is mostly past at this time. As an advisor to domestic farmers nationwide he says to consider the seasonal standpoint and realize “making a lot of sales at harvest is rarely the right thing to do.”
Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, had this to say regarding the fundamental assessment of the wheat futures markets, “It’s not just here in the States where we have had weather problems creating volatility, but now there’s weather situations arising world-wide such as Australia, Brazil, and Russia – Brazil currently with the heavy rains.” Plotkin adds, “There should be more wheat (futures) volatility to come, but there should be more upside potential than downside looking forward.”
Wheat futures trend is down at this time and it is going to take more action to change that. I would expect wheat futures to continue this leg up through tomorrow, but at least one more test of the low before an up-trend were to emerge.
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 Seasonal Trend Can Change With Planting Schedule
Soybean futures usually follow corn in planting each season, but a Midwestern field agronomist is touting a change in this long held view in an effort to produce higher yields than customary. Soybean futures are up .11 cents today, currently trading just above $9.53 per bushel at the Chicago Board of Trade.
The challenges to planting soybeans earlier than normal include labor logistics and equipment modifications, however an expert says certain key factors in understanding better results for plant “canopy closure” will provide soybean farmers better yields. She says for this to happen there must be an “increase in soybean nodes and pods per plant” which brings us back to the need for farmers to better understand canopy closure in their fields.
Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, had this to say regarding the fundamental assessment of the soybean futures markets, “An earlier growing season has the potential to alter the seasonal tendencies that have been established for hundreds of years of soybean growing.” Evans adds, “Soybean harvests could begin sooner…a germination and emergence change can alter seasonal highs and lows between planting and harvesting.”
The trend for soybean futures is down and a relief rally appears to be emerging at this time. Soybean futures 18-day moving average is about .25 cents higher, so there may be higher prices near-term.
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.
India Set to Become World’s Top Cotton Producer: Cotton Futures
Cotton futures is having to negotiate a top cotton producer with India – a country surpassing the US and China as they are reporting double-digit acreage reductions for the 2015/16 season. Cotton futures are down 36 points today settling at .6364 cents per pound at the Intercontinental Exchange in New York.
Combined, the USDA says both China and India produce more than one-half of the world’s cotton, but now India’s “cotton climb” since it surpassed the US in cotton production in 2006 is expected to bring forth 26.5% of world supply. China has been the worlds top cotton producer since 1982, with Brazil and Pakistan rounding out the top five.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, had this to say regarding the fundamental assessment of the cotton futures markets, “The ‘landscape’ is changing in the agri-business world with the use of biotechnology and we’re seeing this with cotton too.” Levy adds, “Farmers are proving to make the best of new technology and it appears the Indian farmers are running with it.”
Cotton futures trend is technically down, but more choppy for more than the past four months. I would expect some type of rally in cotton futures soon where short-selling will be least risky.
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 and 10yr. T-Notes (New this week.)
DOWN Trending Futures Markets: Gold, Copper and Corn, Soy Oil & Coffee (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 Rise, Then Fall, .75 Cents After Wettest Season in 30 Years
Corn futures, in a one month period, have rallied and retreated .75 cents over precipitation concerns in the corn belt region of the Midwest. Corn futures are up .04 cents going into Thursday’s close currently trading just above $3.82 per bushel at the Chicago Board of Trade.
The rains in the state of Illinois alone are prompting state officials there to possibly request federal disaster assistance after receiving the most rain from May to present in the last 30 years! While Illinois is reported to have over 22 inches of rain between May & June, the water-logged fields might not reduce corn yields as much as it appears – according to an expert Midwestern analyst.
“In past years of similar heavy rains when things looked bleak for the corn harvest, the yields surprised the experts and this year is shaping up with similar statistics,” said Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, regarding the fundamental assessment of the corn futures markets. Brady added, “It will take more time to get a clear picture and this suggests more volatility for corn (futures) this summer.”
The trend for corn futures is down and this particular market has sold off from its mid-July high near $4.55 per bushel with absolutely no retracement from July 14th. Corn futures is a market that the novice trader should stay away from, and for the professional it should require a contraction of volatility before taking any position.
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.
Summer Slump for Cattle Futures May be Temporary
Cattle futures are said to be following their typical spring high to summer low trading pattern – albeit at much higher beef prices than just a few years ago – but there are signs prices can resume higher once the summer slump has passed. Feeder cattle futures are up today $0.575 cents per pound currently trading at $211.82 (CWT) at the Chicago Mercantile Exchange.
Feeder cattle prices from early April (to present) have fallen almost $22 per pound – a 13% drop in price – but in the five year period from 2010 to 2014 feeder cattle prices have averaged not quite a 10% drop in the same time period. Industry experts claim feeders may continue to drop until mid-August, but find some type of support thereafter.
“Cattle (futures) prices are still high and the bigger than usual drop in price may reflect beef prices coming back to normal,” said Laura Taylor, a senior market strategist at RJO Futures in Chicago, regarding the fundamental assessment of the cattle futures markets. Taylor added, “When beef prices are high the average consumer finds alternative meals to afford, or feed their family’s. This cattle situation is no different.”
Feeder cattle futures trend is down with no bottom yet in sight. In my study I find there is support coming in at $206.00 (CWT) which tells me feeder cattle futures can still slip lower from this current level.
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.
Hog Futures Making Slow Comeback as Record Production Maybe Spurring Demand
Hog futures have halted their first-quarter slide and appear to be making their way higher as record production of hogs is reportedly putting more pork on the menu. Hog futures are up over $1.52 per CWT and are currently trading at $65.07 (CWT) at the Chicago Mercantile Exchange.
Wholesale prices of pork are down 40% since last summer and more restaurants are reportedly buying more of the product to serve and apparently this is creating demand. With prices so low compared to beef, domestic pork production is heading for an all-time high this year.
“With all the extra pork supplies out there, restaurants of all types are seeing the value and creating more items to serve to the public,” said Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, regarding the fundamental assessment of the hog futures markets. Medina added, “The hog trade appears to have picked-up on the demand and stopped the early year onslaught.”
The trend for hog futures appears to be in a very early stage of an up-trend. Prices are still low enough for pork lovers to enjoy their favorite sandwiches or dishes, but a breakout above $72.00 (CWT) could mean steadily higher prices down the road.
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 and Soybeans
DOWN Trending Futures Markets: Silver, Gold and Copper
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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