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Schad Commodity Blog & Commentary
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From the desk of Brian Schad:
Farmers Reported to Reduce Planting Due to Spiraling Cotton Futures Prices
Cotton futures may be finding support in the not-so-distant futures if the Int’l Cotton Advisory Committee’s assessment is correct. They say the current five-year low in cotton (futures) “will prompt farmers world-wide to reduce planting” and of course, by interrupting the cotton production process, cotton (futures) prices, by default, will rise and benefit the farmers once again.
The executive director of the committee has already expressed these sentiments by stating at a cotton industry conference held in Mumbai today that “the impact of lower (cotton) prices is already evident in planting intentions in the Southern Hemisphere including Brazil.” Here in the US, the USDA is said to estimate the world’s largest consumer of cotton, China, will cut-back on their imports from both India and the US.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, had this to say regarding the current cotton futures situation, “Cotton farmers seem to be in a major competition to off-load their (cotton) supply.” Craney added, “Eventually, once the process of declining cotton prices, lost revenue for the farm – some farmers even going out of business is played out, cutting back on cotton production is a certainty as part of the process.”
Cotton futures trend is down with no bottom in sight. I had been short cotton futures coming into today for the second time in the past week, but have been stopped out today. I still anticipate cotton futures to breakout lower to the lower .50c range soon.
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, I update my 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 my 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, I monitor them on a weekly basis. Although the futures markets themselves will ultimately provide the most accurate illustration of trend, these (weekly) charts that I have identified, serve to forewarn us of the next possible bigger move.
Here are the commodity markets which illustrate the bigger picture changing for them:
UP Trending Futures Markets: NASDAQ Index, Corn, CBT Wheat and S&P 500 Index (New this week.)
DOWN Trending Futures Markets: Crude Oil, Gold, Silver, British Pound, Euro-FX and Copper (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.
Hog Futures Heading for Biggest Annual Gain Since 2010
Hog futures traded at the Chicago Mercantile Exchange have risen as high as 7.5% year-to-date, heading for the biggest gain in four years. Hog futures are currently trading at $0.9040 cents per pound, down $1.25 from yesterday’s close.
This year there have been reportedly five-million fewer hogs sent to slaughter so far, which in turn has reduced the number of whole hams sent to market. To help compensate for the reduced number of hogs (for hams), pork producers have fattened-up the animals by 17%+ to increase the size of the hams to be offered as “half-hams” once at the grocery stores.
“With the (hog futures) price increase we have seen, producers are doing all they can to put weight on the animals,” stated Kevin Riordan, director of research at Capital Trading Group in Chicago, sharing his fundamental analysis insight regarding the current hog futures situation. Riordan adds, “As the tale goes, however, the best antedate for high meat prices is “high meat prices.” We should see a seasonal high in hog futures after the holidays.”
The trend for hog futures is newly emerged as up. I was in-and-out of hog futures earlier today attempting to buy them on a drop in price which started earlier 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.
Record US Crop Send Soybean Futures Sliding to Lower Lows
Soybean futures have abruptly retreated from a three-month high made only last week as farmers race to increase sales from this harvest’s bumper crop. The US is the world’s biggest producer of soybeans and soybean futures is one of the featured markets hosted at the Chicago Board of Trade.
With the USDA reporting 94% of the soybean harvested earlier this week, they also mentioned output unceasing 18% to a nearly 4B bushel record. Also, it is reported that as of yesterday, premiums on soybean supplies for export from New Orleans have fell to the lowest since early summer.
“The race to sell this year’s soybeans at a premium has begun from this recent .60c sell-off,” stated Jeff Evans, a Senior Broker and Vice-President of the Managed Accounts Division for RMB Group in Chicago, sharing his technical analysis insight regarding the current soybean futures situation. Evans added, “Eventually we should find soybean futures support when the farmers hold out for higher prices.”
Soybean futures trend remains up, albeit with a possible top in sight. I am still looking for buy signals with soybean futures until a clearer picture proves to me otherwise.
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.
Grain Futures Decline as Record Harvest Nears Completion
Corn futures and soybean futures are experiencing their biggest drop in the past two weeks as the domestic US harvest draws nearer to completion. This year’s harvest is proving to have ample supply as expected and grain futures are currently finding support at this time.
The USDA reports that as of Sunday, 89% of corn has been harvested (ahead of the average pace) from the country’s main growing region, with an expected harvest of just over 14.4B bushels – an all-time high. For soybeans, 94% of the harvest has been completed (2% behind schedule) with record production expected to be nearly 4B bushels.
“As the U.S. harvest nears to a close for corn and beans, the record level of crops coming from the fields is continuing to supply pressure to the futures prices,” stated Barb Levy, chief director for The Fox Group’s futures division in Chicago, sharing her technical analysis insight regarding the current grain futures situation. Levy added, “Additionally, cheaper priced grain coming from Argentina and the Ukraine have hurt foreign demand for U.S. grain.”
The trends for all grain futures is “up.” The soybean futures (and corn futures) complex may be “topping” to find a seasonal-low in December/January, and wheat futures are looking to be in mixed conditions. I continue to trade grain futures with caution.
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: Corn, CBT Wheat, Soymeal and NASDAQ Index (New this week.)
DOWN Trending Futures Markets: Euro-currency, Crude Oil, Silver, Gold and British Pound (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.
With Jobless Claims Up More Than Forecast, Gold Futures Pause
Gold futures have virtually paused between its recent downtrend low of $1,130 per ounce, and the recent high near $1,180, once the Department of Labor released its weekly “jobless claims” report revealing an increase of claims more than previously forecasted. Gold futures are currently trading at $1,160 per ounce in New York.
Gold futures have plummeted just over 16% since the beginning of the third-quarter to a four-year low just last week, and have only managed what appears to be a 2.7% “dead-cat” bounce since. The only bullish news on the horizon comes from the World Gold Council that claims they’re “quite optimistic” for gold (futures) to rise on jewelry demand after this low last week.
“Overall the (gold futures) market is bearish and retains potential for declines around 1075-1070. A close over 1179.90 could secure a bull turn and motivate stronger retracements to 1190,” stated Laura Taylor, a senior commodities broker at RJO Futures in Chicago, sharing her technical analysis insight regarding the current gold futures situation.
Gold futures trend is down with no bottom yet in sight. If fact, gold futures now appear to be “coiling” in price which highlights a possible breakout soon – most likely in the direction of the trend.
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.
Feeder Cattle Futures Suggests Animal Profits Steady Above $200 Per Head
Feeder cattle futures show no signs of backing off their record high prices set just last month and according to an industry expert, cattle feeding margins last week are topping out at a handsome $209 per head. Feeder cattle futures are currently trading at $2.3345 per pound (as of this writing) at the Chicago Mercantile Exchange – this is between the early October contract high of nearly $2.40 and last month’s low of $2.25725 per pound.
The beef experts went on to say feeding profits may be down $20 bucks per head from last month, but are $177 higher than this same time last year. Beef packers, however, claim they are experiencing long running negative margins and only seeing modest improvement of $8 per head – only realizing a $75 average loss per animal processed saying this is nearly double from only last month.
“We’ll most likely see high prolonged beef prices until the domestic herd is brought up to former levels where supply met demand. I understand this may be as long as two-three more years according to beef authorities,” stated Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, sharing his insight regarding the current feeder cattle futures situation.
The trend for feeder cattle futures has resumed up only recently in my work. With the market currently testing last month’s contract high price, there is 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.
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