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Welcome to the Agricultural Futures Trading’s agricultural / commodity futures trading blog. Each day our veteran AG Futures Trader provides unique insights into the commodities markets with over 20 year’s experience.

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Demand by World for Palm Oil Can Boost Soybean Oil Futures

Soybean oil futures have plummeted to prices not seen since 2002 and should be near a bottom in part by increasing palm oil demand increasing by importers in Europe, according to Oil World. Soybean oil futures reached new lows even today just below the .32c level.

The Hamburg research group claims in the first-half of this year, palm-oil imports from the EU rose to a record of just a little more than 3.33M metric tons – about 3% more than in the first-half of 2013. Oil World’s report delivers a belief in a “near-bottom” for the cooking oil because of low global stockpiles.

Low soybean oil (futures)prices have caused an increase in European demand in the first half of 2014. We believe the low prices for year have either already occurred or will occur very shortly,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, sharing his insight regarding the current soybean oil futures situation.

The trend for soybean oil futures is clearly down with no bottom yet in sight. I am compelled to continue taking each short trade until the overall soybean oil futures picture changes.

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AgFutures Trading 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:  Coffee (New this week.)

DOWN Trending Futures Markets:  Soybeans, Lean Hogs, Kansas Wheat, Sugar, Corn, British Pound, Euro-currency, Japanese Yen

To see “An Insider’s View of the Next Big Market Move,” find your way to http://AGFuturesTrading.com | Contact Us and fill in the form on the right-hand side. What are you waiting for…? It’s FREE!

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Wheat Futures Breaks Out to 3-Week High on Black Sea Region Concerns

Wheat futures continue to grind higher with higher highs and higher lows since basing from late last month. Wheat futures have risen to a three-week high on the outlook of supplies from the Black Sea area could be compromised with tensions escalating between Russia and Ukraine.

The Commercial Traders Index monitored each week illustrates wheat futures speculators cutting away from short positions for the last three weeks. According to the USDA, the Black Sea region accounts for 21% of all global wheat exports.

Fears of additional Russian and Ukraine fighting going into the long weekend gave the wheat market a boost. Look for continued (wheat futures) volatility with conflicting reports coming out of the Black Sea region,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, sharing his insight regarding the current wheat futures situation.

Wheat futures trend is technically “down” at this time, but as I mentioned in the opening comments there is a very strong base where it appears there has been a “turn-over” from short, to long, speculating. I need a clearer picture to unfold, but I am looking forward to the change in trend upward when it comes!

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Shortages to Ensure Recovery in Prices Still Not Enough for Sugar Futures

Sugar futures is in a unique situation with “price discovery” with supply and demand, according to the Int’l Sugar Org. They are of the opinion that before sugar prices can recover significantly, global sugar consumption needs to be more than three to four times what the projected supply will be.

The senior economist for the I.S.O. claims the global market should have a surplus of only 1.3M tons starting in October and a small deficit the following year. In October, it will start the fifth-year of a world-wide sugar glut.

Sugar supplies are so high that for sugar prices to recover in any significant way we will need close to a 3-4 million ton deficit in consumption versus supply,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, sharing his insight regarding the current sugar futures situation.

The technical trend for sugar futures remains down with no bottom yet in sight. This has become a tricky market in the fact that in can be weeks before sugar futures retraces enough to “sell the rallies.”

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Coffee Production in Brazil Set for Longest Decline in Almost 50 Years

Coffee futures are once again poised for more upside action as prolonged drought in Brazil is claiming much of that nation’s coffee crop. Coffee farmers are preparing for the worst as Brazil heads for its first three-year production decline since 1965.

Production from the world’s top-grower of the Arabica Coffee variety is expected to drop as much as 18% (from last year at this time) when the harvest ends next month – this coming from a 3.1% decline only last year according to Brazil’s National Coffee Council’s estimates. The Council also estimates coffee farmers collecting less of a harvest next year which would be the longest slump since the mid-’60’s.

Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, shared his insight regarding the current coffee futures situation by stating, It appears as if the only way out of the coffee situation in Brazil is a miracle of much needed rain.”

The trend for coffee futures has resumed up since late last month. The initial margin requirement for coffee futures is $5,700 per contract so I must choose the trades wisely. I have coffee futures higher (in my work & studies) into the end of the week. With coffee futures up 940 points today, our target is about 700 points higher.

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AgFutures Trading 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:  None this week.

DOWN Trending Futures Markets:  Soybeans, Wheat, Cotton, Lean Hogs, Kansas Wheat, Sugar, Corn, British Pound, Crude Oil, Euro-currency, Soy Oil and Japanese Yen (New this week.)

To see “An Insider’s View of the Next Big Market Move,” find your way to http://AGFuturesTrading.com | Contact Us and fill in the form on the right-hand side. What are you waiting for…? It’s FREE!

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Corn Futures Up on Outlook of Domestic Yields Not Topping Estimate

Corn futures are up today on the outlook that yields are looking more and more as the USDA estimates for this year’s harvest. The United States is the world’s biggest grower of corn and one of the top four most valuable crops.

Within the last two weeks, the USDA estimated the domestic corn crop to be 167.4 bushels per acre. An analyst from this year’s Pro-Farmer Midwest Crop Tour was quote yesterday saying “national yields probably won’t top 170 bushels per acre” – right in line with estimates.

Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, shared his insight regarding the current corn futures situation by stating, After the huge move lower corn seems to have found some temporary support. Traders are still concerned about dry conditions in Eastern Iowa as the past week’s storms didn’t drop any rain on the region.”

Corn futures trend remains down with contract lows made just last week. Although I feel more short corn futures trades are ahead, my instinct tells me we may have some type of retracement higher to go first before new lows are made closer to harvest time.

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India Set to Pass China as Biggest Cotton Producer

The Cotton Association of India claims their country is boosting cotton production to near record levels as farmers there are planting the biggest area ever dedicated to cotton. Cotton futures have already fell 24% this year on the news of US and Chinese reserves increasing to global record stockpiles.

To further pressure cotton prices, the Indian harvest (beginning in October) is expected to be more than 6M tons previously estimated for India by another agency, and adding to the nearly 6.25M tons of Chinese output. However, Chinese output can fall 24% next year as their government ends direct purchases from farmers.

Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her insight regarding the current cotton futures situation by stating, With the Chinese prioritizing their crops, cotton production is expected to be lower, but India’s cotton can more than make-up for China’s shortfall should their weather remain favorable.”

The trend for cotton futures remains technically down at this time. On the first day of trading this month, cotton futures set new contract lows, so I view today’s action as a retracement higher until a clear picture unfolds.

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Cattle Futures at Crossroads with Greener Pastures Signaling Beef Rebound

In America’s heartland, there are developments signaling a changing situation with US beef supplies as the grazing pastures turn greener. The recent rains may be attributed to turning the cattle futures markets into full retreat – but only time will tell.

Drought and cattle selloff at markets all around the nation have put the domestic-herd at a 63-year low, but pasture conditions are said to be mostly recovered from the 2012 originated drought that forced ranchers to sell-off their inventory of animals. Cattle futures are already showing signs of “topping” after reaching record highs highs just last month.

Laura Taylor, a senior commodities broker at RJO Futures in Chicago, shared her insight regarding the current cattle futures situation by stating, “…packer profit margins improved on the recent break and this might slow or stop the steep decline in cash prices see over the past several weeks.”

Although cattle futures trend is technically “up,” I am seeing the first signs of divergence at these levels. If feeder cattle futures continue downward and take out last week’s low (2.1107), I will have to reverse my thinking.

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