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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:
China’s Economy May be Foretold by Copper Futures
Copper futures continue to falter as lack of movement in China’s copper inventories tell of a market with slack demand. Copper futures are down 130 points today currently trading at $2.1520 per pound for September delivery at the Commodity Exchange in New York City.
China is the worlds largest importer of copper and user of the industrial metal by making grand items used for infrastructure and as small as coins. Right now China’s economic numbers do not project growth and the lack of demand in current inventories is corroborating the outlook for the copper market.
BMI Research, a leading industry analyst group, shared their fundamental view of the copper futures market by stating, “We expect China’s refined copper imports to decelerate over the remainder of the year, and will remain wary of any other rapid movements in inventories.” BMI adds, “While the corresponding decline in Shanghai inventories largely offset the jump in [London Metal Exchange], the shift suggests that China’s strong H116 economic data does not in fact reflect improving demand growth.”
The trend for copper futures has just turned “down” as of Friday. Copper futures overall remain range-bound, however since March.
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, Natural Gas, Russell 2000 Index and Copper & Live Cattle (Both new this week.)
DOWN Trending Futures Markets: Soy Oil, British Pound, Lean Hogs, CBT Wheat and Crude Oil & Corn (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.
Corn Futures at a Crossroads as China Set to Cut Corn Production
Corn futures have halted its $1.20 downtrend since mid-June as Reuters has broken the news about China planning to cut corn production. Corn futures are up a mere .01 cent today currently trading at $3.36 per bushel for December delivery at the Chicago Board of Trade.
This would be China’s first cut in corn production in 13 years which is reported to be by 3.29M acres, but according to the USDA, China still has 37M hectares devoted to corn – 14M hectares more since 2001. This cut in production is said to be an attempt to reduce massive stockpiles of about 250M tons in inventory.
Danielle Bourbeau, a commodity broker for Capital Trading Group in Chicago, shared her fundamental view of the corn futures market by stating, “Its obvious to see with so much corn in China’s inventory, there won’t be any imports of corn for them any time soon.” Bourbeau adds, “Now what will this do for our corn (futures) market?”
Corn futures trend is “down” with no bottom yet in sight. In my opinion, corn futures prices are treading near production costs so farmers may be wanting to do something about this…
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.
All Eyes On Corporate Earnings & Data While Stock Futures On Track for 8th Straight Loss
Stock futures barely opened lower today with investors standing-by to evaluate a fresh release of corporate earnings and key US economic data with the possibility of the Dow Jones Industrial Average’s eight straight loss. The Dow Jones stock market is up at mere 22.67 points today currently trading at 18,337 and change at the New York Stock Exchange.
The current environment of falling crude oil prices and shaky economic data caused the stock markets to suffer their worst day in nearly a month. Prior to yesterday’s plunge, a string of disappointing economic news has investors pricing in a potential rate hike by a one-eight chance by the end of next month (38% by December).
Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her fundamental view of the stock futures market by stating, “The uncertainty of the US economy has investors looking ahead to see if the world’s largest economy is healthy enough to have the Federal Reserve hike interest-rates later on this year.” Levy adds, “As time passes lately, the chances of higher interest-rates are dwindling.”
The trend for stock futures is clearly “up” – as with all stock markets at this time. Only with the Dow Jones stock market are we seeing a possible top formation forming, so more time needs to pass to see a clearer picture of things with stocks.
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 Climb as USA & Brazil Open Beef Trade
Cattle futures (feeders) have climbed over $12 (per cwt) in the past two weeks amid US & Brazil exchanging food safety documents to open beef trade. Feeder cattle futures are up $1.05 cent today currently trading at $145.80 per cwt at the Chicago Mercantile Exchange.
Just yesterday both governments reportedly food safety equivalence documents that is expected to open their respective markets to fresh beef exports – a boon for Brazil with $900M expected to boost that industry. Right now Brazil only exports beef from one part of the country, but this agreement opens up their whole country for exports and will be -by far- the world’s largest beef exporter.
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, shared his fundamental view of the cattle futures market by stating, “Once the tee’s are crossed and the eiye’s dotted it could be a matter of 90 days before the US sees Brazilian beef exports come our way.” Brady adds, “There is speculation as much as 60,000 tons of imported beef could enter the country this year.”
The technical trend for cattle futures has recently emerged “up,” but for how long? Cattle futures continue to trade above $1.00 a pound which was unheard of only a decade ago, and with more beef in supply we may see a slide even lower as time passes – which will be a win for 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.
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, Natural Gas and Russell 2000 Index
DOWN Trending Futures Markets: Soy Oil, British Pound and Cocoa, Lean Hogs & CBT Wheat (These three 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.
Current Global Grain Market Shines on US Wheat Futures
Wheat futures may be getting a boost today from a report I read regarding Europe’s wheat production challenges a possible boon for the American farmer in the foreseeable future. Wheat futures are up .01 cent today currently trading at $4.16 per bushel at the Chicago Board of Trade.
This past week it was observed by a commodity trading professional that Europe seems to have a double-whammy problem of “quality problems” over a broad area and talk from across the pond that the yield isn’t as quite good as expected. There is a very good possibility that some European business may be shifting to the United States.
Jim Bower, of Bower Trading – a commodity futures specialty firm, shared his fundamental view of the wheat futures market by stating, “I actually thought wheat acted halfway decent [this past week] because it seemed kind of to ignore bearish news.” Bower adds, “Now it may take a little while, but I think the worst is over in wheat.”
Wheat futures trend is “down” with no bottom formation completely in sight. Wheat futures current low around the $4.07 level is currently being tested..
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.
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.
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