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Schad Commodity Blog & Commentary
This commentary is intended to provide unique insights with my 30+ years experience for the commodity crypto & 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:
Rise in Production Prompts Ivory Coast Officials to Evict Unlawful Cocoa Farmers from National Park: Cocoa Futures
Cocoa futures are hovering just below its multi-year highs and the rise in production from country’s such as the Ivory Coast – which supplied 40% of world’s cocoa demand last year – may be prompting the market to back off because of lessor demand. Cocoa futures are down $10 today currently trading at $3,082 per ton at the Intercontinental Exchange.
The Ivory Coast’s Mont Peko Nat’l Park is reported to have an illegal population of 28K farmers taking advantage of the cocoa production boom which, officials say, have destroyed 99% of the 34K hectares park. The unprotected forests in the entire area account for the 600K tons of increased production from the 2000/1 season.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, shares her view regarding the fundamental situation of the cocoa futures markets by stating, “The cocoa farmers in West Africa have been doing all they can to keep supply matched with demand, but doing so illegally and now being forced away from farming (in the national park) may change the fundamental dynamics for this market.” Levy added, “Cocoa futures could head right back up to their 2011 highs if the supply isn’t there.”
Cocoa futures trend has just rolled over to the down side late last week. In the overall picture of cocoa futures, it may be in a sideways trading pattern unless it can close weaker than $3,000 per ton, or close higher than $3,400 – the current trading range since mid-May.
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: Lean Hogs and Sugar & 10yr. T-Notes (Both new this week.)
DOWN Trending Futures Markets: Soy Oil, Coffee, Cotton & Feeder Cattle
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.
Sugar Futures Higher on India’s Drought Woes
Sugar futures have climbed nearly .02 cents a pound since the latter part of September amid India’s first two-year drought in three decades – thanks to El Nino’s disruption of the normal monsoon season there. Sugar futures are up 38 points today currently trading at .1326 cents per pound at the Intercontinental Exchange.
Brazil and India are the world’s top producers of sugar and data from India’s meteorology department reported rains during the June through September monsoon season were only 86% of their normal level – qualifying it as an official drought for the second year. Sugar production in another region in the country is reportedly seen down 14% from last season.
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, shares his view regarding the fundamental situation of the sugar futures markets by stating, “Sugar plantings (in India) may be limited because of the unusual weather happening there.” Brady added, “The dry weather can easily be perceived as a ‘bad investment’ for sugar farmer’s new plantings.”
The technical trend for sugar futures has been up since mid-September, but has only broken out to the upside this week. I am looking for some kind of pull-back in sugar futures before committing to the long-side of this market.
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.
USDA Downgrade of Harvest & Stocks a Boost For Wheat Futures
Wheat futures have rebounded from negative territory after the USDA reported the current harvest and inventories of the grain rose less than analysts predicted. Wheat futures are up more than .07 cents today currently trading at $5.11 per bushel at the Chicago Board of Trade.
Wheat futures gained 2% for the day when before the USDA report was released it was trading just below $5 per bushel, but immediately following the report it quickly shot-up to nearly $5.15 per bushel. Although today’s USDA estimate is more than last year’s wheat output, it is reportedly 85M less than what was estimated by them only three weeks ago.
Laura Taylor, a senior market strategist at RJO Futures in Chicago, shares her view regarding the fundamental situation of the wheat futures markets by stating, “The wheat (futures) trade was looking for supportive numbers having changed trends (from down) lately.” Taylor added, “In the bigger scheme of things it will take much more exports, or demand picture overall, to sustain and support this market in my view.”
The trend for wheat futures is mixed with soft-red variety in a new uptrend, but hard-red still in a technical downtrend. Wheat futures tend to drift higher this time of year well after their northern hemisphere harvest, but I’ll need to see a more clearer picture unfold before getting too excited about being on the long side.
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 Pricing-In Harvest at 18% Complete
The corn futures trade is pricing-in the harvest activity currently underway in the 18 states that have made-up 94% of last year’s corn acreage. Corn futures are up almost .03 cents today trading at $3.895 per bushel at the Chicago Board of Trade.
The nation’s primary corn producing states begin in the Great Plains region from as far south as Texas straight up to the Canadian boarder, to as far east as Pennsylvania. As of Sunday, the USDA reports the cumulative amount of states producing corn are 18% harvested which can be compared to the five-year average of 23% harvested at this point in time.
“Some of the corn producing states are way ahead in their harvest than others,” said Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, sharing his assessment regarding the fundamental situation of the corn futures markets. Medina adds, “In the next month the corn (futures) trade will be looking even closer at the harvest progress – still early in the corn harvest period for something definite to be foretelling.”
Corn futures trend is down, however at a crossroad. If corn futures can trade above yesterday’s high of $3.925 per bushel in the next couple of days, that could change the technical picture.
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: Lean Hogs
DOWN Trending Futures Markets: Soy Oil, Coffee, Cotton & Feeder Cattle
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.
US Data & Need for Fed Clarification Send Gold Futures Soaring
Gold futures have blasted-off today reportedly once mixed domestic data highlighted uncertainty with the Federal Reserves timing of their next rate hike. Gold futures are up $22.40 per ounce currently trading at $1,153.90 at the New York Commodity Exchange.
The US Commerce and Labor Departments both released information such as initial jobless claims, durable goods orders (and “core” durable goods orders), orders & shipments for core capital goods, which came in outside analysts projections, but also revisions from previous reports were eye-openers for the gold trade. Later today, the Federal Reserves Chairwoman will be delivering a speech that investors will be listening to that may provide clarity on last week’s decision to keep interest-rates steady.
“Much information released today which the gold (futures) trade is projecting as inflationary,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, sharing his assessment regarding the fundamental situation of the gold futures markets. Craney adds, “Couple the possibility of inflation with the fed’s leaving interest-rates unchecked and boom, there goes gold (futures).”
The trend for gold has been back and forth with big swings in the past month, and is now at a crossroad to switch back up. Gold futures will require a little more action to the upside to change the direction to up in my work, however.
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 Risk with the Drop of Brazilian Real
Soybean futures have been put on notice coming into the northern hemisphere harvest, but in the southern, the currency crisis in Brazil has been a boon to soybean farmers there looking to unload their crop. Soybean futures, down four out of the last five trading sessions, is holding steady (up just over a penny) currently near $8.62 per bushel at the Chicago Board of Trade.
The Brazilian Real has fallen to a record low compared to the US Dollar, but the fall of the currency is setting-up favorable conditions for farmer’s there to see record high soybean sowings, despite early dry weather conditions. This Brazilian currency crisis, which provides great support for those farmers, may be an Achilles heel to farmers elsewhere with soybeans plentiful in supplies and stocks.
“Soybeans are reportedly selling for nearly $20.50 per sack at Brazil’s port of Paranagua which is up 33% for the year – good for the economy there,” said Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, sharing his assessment regarding the fundamental situation of the soybean futures markets. Plotkin adds, “Here in Chicago, however, soybean (futures) are down just over 14% in this same period. We may be chasing the Brazilian soybean market here…”
Soybean futures’ trend is down with no bottom yet in sight, however, the market is approaching long-term support that goes back to late 2012/early 2013. With harvest period in sight, I expect soybean futures to remain choppy to down at best until clearer fundamental conditions are learned after harvest.
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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