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Schad Commodity Blog & Commentary
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From the desk of Brian Schad:
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.
Argentine Exports Expected to Rise by Farmer Sales Seen Slowing Soybean Meal Futures
Soybean meal futures may be preparing to decline as news from Argentina suggests processors there are stepping up their exports. Soybean meal futures have experienced a big boost last month, enough to get the attention of grain processors in the world’s biggest exporter of soymeal.
Argentina is expected to ship between 1.2-1.3M metric tons of soymeal during this first-half of November, and total soymeal exports for this month is anticipated to be nearly one-million tons more than this same time last year at this current rate (if it can be kept up). Soybean meal futures blasted-off out of nowhere last month due to delayed domestic shipping, and this delay effectively shifted importers demands to South American suppliers – thus, the decision to “step-up” processing.
Soybean meal futures trend is up, however, I see possible “topping” action in this range between $410 – $370 per ton. This bounce in soybean meal futures today is the reaction to yesterday’s sell-off after the monthly USDA crop production report was released. I am proceeding 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, Soymeal and CBT Wheat (New this week.)
DOWN Trending Futures Markets: Sugar, Euro-currency, Crude Oil, Silver and Gold (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 Initially Decline as USDA May Boost Forecast
Corn futures were initially lower in this morning’s trading on the outlook Monday’s USDA report will show even larger domestic grain crops than previously expected. Corn futures has since rebounded into the black currently trading up .03 per bushel at the Chicago Board of Trade.
A new survey of expert analysts now claim corn farmers may harvest over 14.5B bushels of corn – which would be the most ever, and larger than last months forecast of 14.475B bushels. Corn is the USA’s number one cash crop (followed by soybeans, then “hay,” and wheat) and also the biggest grower of corn in the world.
Kevin Riordan, director of research at Capital Trading Group in Chicago, shared his insight regarding the current corn futures situation by stating today, “Heading into next week’s USDA (crop report), traders are hesitating establishing aggressive positions. Many traders believe the report will reflect an increase in production in both corn and soybeans.” Riordan added, “Possibly a pickup in yield estimates also…”
The trend for corn futures is up since the second week of October. We are long corn futures and may stay long going into Monday’s report.
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.
Alabama Cotton Farmers Anticipate Good Crop; Cotton Futures Lower
Cotton futures have been trading range-bound for the last three months after selling off from their spring highs earlier this year in anticipation of this year’s cotton harvest now underway. In Alabama, if the cotton growers can escape potential flooding they expect a good crop – and much of it.
In two years time, cotton futures have sold off to half the price it once was, so cotton farmers are having to plant twice as much cotton to compensate for the declining prices. Estimates in Alabama are calling for average yields of about 850 pounds to the acre, so their cotton gins in some locations are running 24-hours a day.
Jeff Evans, a Senior Broker and Vice-President of the Managed Accounts Division for RMB Group in Chicago, shared his insight regarding the current cotton futures situation by stating today, “While earlier this year I was near term bullish cotton, the recent shift in global currencies devaluing against the US Dollar has caused commodity prices in general to trend lower. Quite simply, a stronger US Dollar buys more cotton (priced in Dollars) and this trend is likely to continue for some time.”
Cotton futures trend is technically down, albeit sideways to lower for the past three months. I am short cotton futures with an expectation for the market to head lower to the .57-.55c level into the latter part of this month.
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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