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Schad Commodity Blog & Commentary
This commentary is intended to provide unique insights with my 30+ years experience for the commodity crypto & 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:
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 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 their bigger changing picture:
UP Trending Futures Markets: Sugar, Cotton, Gold, Silver, Coffee, Natural Gas, Lumber and Russell 2000 Index (New this week.)
DOWN Trending Futures Markets: Feeder Cattle, Soy Oil British Pound and Euro-currency (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.
Lackluster Dairy Auction Results Sends Butter Prices Reeling
Butter futures took another trip south today spurred by dairy activity around the globe. Butter futures for September delivery are down $0.015 cents today currently trading at $0.236 per pound at the Chicago Board of Trade.
While European dairy activity “appears” optimistic, the latest in a series of dismal GlobalDairyTrade actions in New Zealand suggests dairy prices are heading lower with butter futures leading the way. Although whole milk powder rose nearly 2% recently, the products that are made with it have seen losses.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his fundamental view of the butter futures market by stating, “The butter (futures) market was believed to be strong because of the strength of the European market and the reasonable demand for butter and cheese.” Craney adds, “In other areas of the world, such as on the Asian continent, the weak demand is helping to shift prices lower.”
The trend for butter futures has been sideways to down at best since a significant rally in mid-June. What butter futures prices are doing to the dairy farmer may be a boon to us consumers.
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.
Gold Futures Continued Downfall Against a Strong Dollar
Gold futures extended their losses today from this month’s earlier highs at $1,375 reportedly due to continued progress in a strengthening US Dollar. Gold futures are down $17.50 today currently trading at $1, 314.80 per ounce at the New York Commodity Exchange.
The 1% fall in gold prices today occurs ahead of Thursday afternoon’s big announcement by the European Central Bank’s Governing Council regarding a possible interest-rate hike, as well as the US Dollar sticking near four-month highs. This is the central bank’s first decision on the future of European interest-rates since the Brexit vote last month.
Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, shared his fundamental view of the gold futures market by stating, “The gold (futures) market continues to compete with high-yield bearing assets in an environment of rising rates.” Plotkin adds, “Bullish investors most likely will be satisfied to see a gradual tightening of monetary policy.”
Gold futures trend remains “up” despite today’s big down day. A couple of more days like this for gold futures and we might have to reevaluate gold’s overall 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 CONDITION.
Egypt Said to be Loading Up at Bargain Wheat Futures Prices
Wheat futures continue to fall after Egypt reportedly tendered their second wheat purchase of the season from four different sources. Wheat futures are down just over .10 cents today currently trading near $4.19 per bushel at the Chicago Board of Trade.
The worlds number one wheat importer (Egypt) is said to have paid more for its wheat this past weekend – which is so early in the season – despite discounts from many wheat merchants underscoring a shift to the east in export competition. The 300T tons purchased is almost $2 a ton more purchased on Saturday than today (Tuesday).
“Initially there were 12 offers to Egypt’s wheat tenders and eight merchants actually dropped their price for the weekend business,” said Danielle Bourbeau, a commodity broker for Capital Trading Group in Chicago, sharing her fundamental assessment of the wheat futures market. Bourbeau added, “Wheat certainly remains abundant now and the (wheat futures) prices reflect that.”
The trend for wheat futures is “down” with a possible bottom in place. Although this is the time of year when wheat futures rally, it is still very weak looking in my technical analysis study on my charts.
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 their bigger changing picture:
UP Trending Futures Markets: Sugar, Cotton, Gold, Silver, Coffee, Natural Gas, 10-yr. T-Notes and Lumber (New this week.)
DOWN Trending Futures Markets: Feeder Cattle, Soy Oil 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.
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 CONDITION.
“Higher Prices Here to Stay” for Sugar Futures?
Sugar futures are on the march higher from last summer’s lows and since April when an industry expert helped propel the market higher when it was claimed “sugar prices are here to stay” because of a current world deficit. Sugar futures, however, are down 30 points today currently trading at $0.1942 per pound at the New York Intercontinental Exchange.
It is reportedly estimated that more than 22M tons of inventories over two growing seasons have been removed from supplies, and now the experts have once again altered the forecast for the world sugar production shortfall by another 1.1M tons. Much of this downward revision said to be due to droughts in both Central Europe and India.
“It appears that no matter what the combined two sugar growing seasons produce, sugar stocks will withdrawn by more than 22 million tons,” said Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, sharing his fundamental assessment of the sugar futures market. Brady added, “With this being the case for sugar (futures), stand-by for volatility ahead.”
The technical trend for sugar futures is “up” with a possible top in sight made in the last trading sessions in June. Sugar futures still “appear” strong, however some type of pullback is expected in this market given the recent gains it has made this past spring and early summer.
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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