Schad Commodity’s Monthly Report: An Insider’s View of the Next Big Market Move · September, 2018

Once each month, usually on the first Friday evening, we’ll 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 their bigger changing picture: UP Trending Futures Markets: Eurodollars and S&P 500 Index DOWN Trending Futures Markets: Gold, High-Grade Copper, Lumber, and Silver 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...

Cotton Futures Down Amid News of West African Production to Surge

Cotton futures continue to tank from their earlier August high above .78c now that the news is out about West African cotton production to surge. Cotton futures are down .43 cents today currently trading at $0.6801 per pound for December delivery at New York’s Intercontinental Exchange. Last week the USDA announced from their Dakar-bureau that West African cotton production – formerly damaged last growing season by weather – is prepared to bounce back. Cotton production in the growing regions for the 2016-17 season is believed to reach 24% more than production for last year’s season. “The beginning of the 2016-17 cotton planting campaign started well with enough rains,” said an USDA official, from a bureau in West Africa, sharing their fundamental assessment of the cotton futures market. The USDA added, “In mid-July, 90 percent of the forecasted area had been sowed.” Earlier this month cotton futures had been in a strong up-trend, but a week and a half ago it has rolled over to “down” as the trend remains. With news such as this coming out against cotton futures, it will take much to change the direction. 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...

Even with Heavy Brazilian Production, Sugar Futures Rise

Sugar futures are defying fundamental news such as favorable weather contributing to brisk production in Brazil’s south center sugar-belt region. Sugar futures are up 25 points today currently trading at $0.2023 per pound for October delivery at the Intercontinental Exchange in New York City. Brazil’s “sugar council” Unica reports the south central sugar producing region was up just over 3M tons in the second-half of last month – that’s reportedly up 9.5% from the first-half of July and up 10.6% from the same time last year. With favorable weather in the region, it is allowing a good pace for sugar-cane cutting. Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, shared his fundamental view of the sugar futures market by stating, “Besides the rapid pace in cane cutting, the price of sugar does not favor ethanol production at this time .” Plotkin adds, “We can expect sugar mills to produce more sugar because of these high gas prices.” The technical trend for sugar futures remains “up” with a possible top in place, however. If sugar futures were to breakout below .1875 with lower lows, we could possibly see a new down-trend for 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...

Cocoa Futures May Be In For a Bumpy Ride

Cocoa futures have been on a rollercoaster since February (albeit one could argue December) and if one analyst is correct there is more volatility ahead. Cocoa futures are down 14 points today currently trading at $2,991 per ton for September delivery at the Intercontinental Exchange in New York City. Its not only the uncertainty of the West African cocoa crop prospects, but with last year’s deficit there may need to be heavy production to make up the shortfall. The ongoing weather outlook is believed to be the catalyst for the cocoa market trading erratically. Judith Ganes Chase, a leading independent consultant for soft commodities, shared her fundamental view of the cocoa futures market by stating, “Following a production deficit of 180,000 tonnes in 2015-16, conditions need to be very favorable to close this gap and swing the market to a large surplus.” Gates Chase adds, “This will be more of a challenge with cocoa processing margins now attractive, leading to improved demand.” The trend for cocoa futures is “sideways” and at a crossroad. If cocoa futures were to sustain trading above 3200, we may see an up-trend, but a breakout below the February lows of 2750 may take the market lower. 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...

Agricultural Commodity Futures Bullish Positions Cut by Funds

Hedge funds reportedly continue to cut their bullish positions to the longest extent this year, although the downside to the wheat futures markets may be limited if the commitment of traders weekly report is to be believed. The grain markets are mixed across the board today with soybeans and meal up for the day, while both wheat’s, corn and soy oil continue to lag at the Chicago Board of Trade. The commodity futures regulatory agency – the Commodity Futures Trading Commission – reports large speculators (or, managed money) reduced their long positions last week from the 13 most traded agricultural products from cattle to cotton by almost 57,000 contracts. This has been the fifth straight week big money has reduced their shorts and something we don’t see quite often – not since last summer anyway. Laura Taylor, a senior market strategist at RJO Futures in Chicago, shared her fundamental view of the agricultural commodity futures markets by stating, “After five weeks of reducing bullish bets, the amount of grain and other products in storage must be more than previously thought.” Taylor adds, “Only wheat futures appear to be closer to neutral.” All agricultural commodity futures we trade are in strong down-trends with an exception of the three New York food & fiber markets we trade – coffee, sugar, and cotton. It is going to take much fundamental change to turn things around, most likely, but consumers should be in for some relief after food prices spiked earlier this decade.. ALL COMMENTARY IS CONSIDERED OPINION & VIEWS FROM THE AUTHOR AND NOT A SOLICITATION OF ANY SECURITIES. THE RISK OF...

Coffee Futures Rally Helped by Brazilian Real

Coffee futures (arabica) have reached 14-month highs this week with the help of an unexpected ally – the Brazilian Real – despite the production outlook of the robusta variety. Coffee futures are up 310 points today currently trading at $1.5075 per pound at the New York Intercontinental Exchange. With the combination of dryness in the coffee growing regions in Brazil & Vietnam, and the Brazilian Real reaching its strongest level against the US Dollar, the last month and a half has cause arabica coffee futures to rise 20% versus an 8.7% gain in robusta variety futures. Last month alone, a composite index maintained by the Int’l Coffee Organization showed arabica coffee gaining 7.2% which is three times the gain compared to robusta coffee. “It is currently a tale of two different coffee (futures) varieties traded ‘across the pond’ from one another,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, sharing her fundamental assessment of the coffee futures market. Levy added, “Both coffee varieties have their problems right now, but the prolonged drought in the arabica growing regions are outweighing the production shortages of the robusta type.” Coffee futures trend is up with no top yet in sight. Right now coffee futures appears to be a “buy the dip” 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...