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Schad Commodity Blog & Commentary
This commentary is intended to provide unique insights with my 20+ years experience for the commodity 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:
Higher Than Expected Stocks Setback Sugar Futures
Sugar futures have reversed course after an emerging uptrend Friday once USDA officials came to the conclusion sugar stocks will hit a nine-year high. Sugar futures are down 15 points today currently trading at .1606 per pound at the Intercontinental Exchange in New York.
It is estimated European Union sugar production will increase by 17% in the forthcoming season to 17.4M tons – 900T tons of it intended for commercial use – which compares to the EU’s estimate of 17.6M tons. The USDA Brussel’s bureau, however, revised down the current marketing year’s ending stocks to 1.27M tons, but still 562T tons greater than the official USDA estimate.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her fundamental view of the sugar futures market by stating, “What is not being mentioned is the heavy carryover of sugar stocks from the bumper crop 2014-15 season.” Levy adds, “We may be seeing higher sugar (futures) prices because of the overall global shortfall in production this season.”
The technical trend for sugar futures has turned “up” late last week. Sugar futures will need to breakout above .17c per pound and demonstrate follow-through for the uptrend to most likely be sustained.
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: Japanese Yen, Gold, Natural Gas, S&P 500 Index, Euro-currency, Soymeal, Soybeans, Crude Oil, Silver, Corn and Sugar & CBT Wheat (Both new this week.)
DOWN Trending Futures Markets: Kansas Wheat
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.
Gasoline Futures at Three-Month High Amid Record Demand
Gasoline futures have reached three month highs this week on reportedly record demand. Gasoline futures are down a mere 22 points today currently trading at $1.5925 per gallon at New York’s Mercantile Exchange.
The world’s biggest oil producers are said to have failed in agreeing to an oil output freeze at a time when domestic gasoline demand is surging. With the American peak summer driving season still approaching, US gasoline consumption rose to 9.25 million barrels a day in March – an all-time high for that month – according to the American Petroleum Institute this time last week.
Scott Roberts, co-head of high yield investments and manager of $2.7 billion at Invesco Advisers Inc. in Atlanta, shared his fundamental view of the gasoline futures market by stating, “It doesn’t make sense to go short ahead of summer because of strong gasoline demand.” Roberts adds, “Refiners are coming back and with that crude demand.”
Gasoline futures is up with no top yet in sight one month ahead of the Memorial Day weekend peak driving demand holiday. Even with record demand, gasoline futures remains well below “war-era” prices and I wouldn’t be surprised to see even lower gasoline prices at the end of the year.
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.
As Asian Grind Rises, Cocoa Futures Rally
Cocoa futures have extended their 2016 gains today amid Asian grinders reporting higher-than-expected volumes. Cocoa futures are down 22 points, however, currently trading at $3,189 per ton at New York’s Intercontinental Exchange.
Grinding – looked upon as a way to gauge consumer demand – came in at nearly 149 tons which was up nearly 3% in the first quarter compared to the same time last year, according to the Cocoa Association of Asia, and 1% better than expected. This news has caused cocoa futures to rally nearly 10% since earlier this month.
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, shared his fundamental view of the cocoa futures market by stating, “The cocoa market is reportedly seeing an uptick in Asian grind, and disappointing arrivals in the Ivory Coast.” Brady adds, “Since January the pace is said to be down about 7% year on year. Just enough to be significant.”
The trend for cocoa futures is up with no top yet in sight. At this rate of strength, cocoa futures could easily test the past two years high’s by the end of Spring.
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.
Natural Gas Futures Lower as Outlook Points to Cooler Temperatures
Natural gas futures extended its sell-off from yesterday reportedly as forecasts predicted for cooler temp’s in the heartland to the eastern regions are driving prices lower. Natural gas futures are down 34 points today currently trading at $2.153 per btu at New York’s Mercantile Exchange.
This is the time of year when natural gas traders try to determine spring gas demand by closely monitoring weather forecasts just before warmer weather increases demand. Warmer weather in the southern states is cooling and models now predict “mostly average to below normal temperatures” in the continental 48 states.
Laura Taylor, a senior market strategist at RJO Futures in Chicago, shared her fundamental view of the natural gas futures market by stating, “It’s not long until the gas-fired electrical demand is here.” Taylor adds, “The natural gas trade is eager to get this market going, but a sustained demand outlook is what most needed.”
Natural gas futures trend is slightly bullish. After this recent sell-off it appears natural gas futures is prime for another spike higher, but for consumers the energy prices are still relatively low.
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: Japanese Yen, Gold, Natural Gas, S&P 500 Index, Euro-currency, Soybean Oil, Soymeal, Soybeans and Crude Oil, Silver & Corn (These three new this week.)
DOWN Trending Futures Markets: Feeder Cattle and Kansas Wheat & Live Cattle (Both 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.
Lack of Rain in Tropics May be Support for Coffee Futures
Coffee futures ended the day lower despite news from the Int’l Coffee Organization regarding lack of rain in both Brazil’s & Vietnam’s growing areas and even exports coming to a multi-year low. Coffee futures – despite bullish news – ended the day .047 cents lower trading at $1.24 per pound at the Intercontinental Exchange.
Supply expectations because of lack of rainfall in Vietnam ( the world’s top coffee producing country) and in Brazil’s premier growing region should lend support to robusta prices in the near future. The organization went on to say that, in Vietnam, coffee exports could drop to as low as 1M tons this year – export amounts not seen since 2008 according to Vietnam customs data.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his fundamental view of the coffee futures market by stating, “There is increasing alarming concern for robusta coffee supplies due to lack of rainfall.” Craney adds, “What coffee beans are coming out of Brazil’s next biggest region of coffee growing are said to be 10%-15% smaller than normal.”
The trend for coffee futures is at a crossroads…after finding lows in January an early uptrend emerged, however the rally came to an abrupt halt late last month and has not seen the needed followthrough to sustain the rally. Coffee futures remain in consumer favorable prices relative to the multi-year lows coffee prices are now.
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.
Cattle Futures Lower as USDA Warns on Beef Prices
Cattle futures are lower across the board today as US agriculture officials suggest exports, rather than domestic demand, offer the industries brightest prospects. June live cattle futures ended the day down $1.52 trading at $117.05 per cwt at the Chicago Mercantile Exchange.
The USDA acknowledged the seasonal tendency for beef prices this time of year with barbecue season on the rise, but on the other hand they also stated “both supply and demand fundamentals are bearish for the beef complex.” Recent beef output is shown to be up 4% year-on-year, and also contributing to the bearish outlook the number of cattle slaughtered up 2.5%.
Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, shared his fundamental view of the cattle futures market by stating, “The cattle (futures) market was in bad shape coming into the year, and what rallies we have seen have been short-lived.” Plotkin adds, “This (cattle futures) market can sure use increased exports as its fast approaching last year’s low with cattle on feed report reflecting 100.8% last month versus 100.9% of all last year.”
Cattle futures trend is clearly “down” with no bottom yet in sight (in my studies). Cattle futures should find support another dollar (per pound) lower, but in the meantime maybe we can all benefit by getting the grill in use a little early this year and take advantage of the falling beef prices.
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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