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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:
Schad Commodity’s 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: Soymeal, Sugar, Soybeans, Corn, Russell 200 Index, Cotton, Lean Hogs, Natural Gas, CBT Wheat and Eurodollars, Gold, Silver & Coffee (These four new this week.)
DOWN Trending Futures Markets: High-Grade Copper & Feeder Cattle
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.
Wheat Futures Plummet as Australian Wheat Crop Lifts to Four-Year High
Wheat futures continue their $0.50 cent sell-off from the June 8th $5.24 high as the outlook of Australia’s wheat harvest rising further than expected to a four-year high hits the news. Wheat futures are currently “down” .035c per bushel today currently trading at $4.74 per ton at the Chicago Board of Trade.
The world’s top wheat exporter in the southern hemisphere is said to produce nearly 25.4M tons of wheat for the 2016-17 season – an upgrade of 880T tons from a previous forecast in March. If it comes to be, this will be the most Australia has produced since 2012 when drought plagued the continent.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her fundamental view of the wheat futures market by stating, “This recent wheat production estimation is a significant improvement of well over 1.0M tons over last year’s harvest.” Levy adds, “The pendulum has swung the other way in terms of favorable weather having only heard news of drought and dryer than normal weather in past few years regarding their wheat growing conditions.”
Wheat futures current trend is still technically “up.” However, if we have a couple more wheat futures trading sessions below the $4.86 price threshold, then we could be rolling over to down into the northern hemisphere’s harvest period.
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.
China’s High Demand Commodity Said to be Feeding Half the World’s Pigs: Soymeal Futures
Soymeal futures are up today amid continued buying of the soy-based byproduct in order to feed their pig-population – which happens to reportedly be about 50% of the world’s pork population. Soymeal futures are currently “up” $1.4 per ton today currently trading at $410 per ton at the Chicago Board of Trade.
Soymeal prices in China are said to be up 40% with the volume of soymeal contracts continuing to expand with the animal feed trading in more hands there in a single day than the US consumes in an entire year – completely dominating the Chicago Board of Trade! Also contributing to the demand in soymeal is the fact that dry-weather and flooding in the Southern Hemisphere continue to threaten global supplies of soybeans which are crushed to produce both soybean oil and soymeal used to feed livestock animals.
Monica Tu, a Shanghai-based analyst with Shanghai JC Intelligence Co., who specializes in the soy market, shared her fundamental view of the soymeal futures market by stating, “Downstream users and traders in China have previously kept low stockpiles of soymeal on the expectation of weak demand and prices.” Tu adds, “In recent months, they had to amend their views and restore inventories, supporting solid gains in futures.”
The trend for soymeal futures is up, however, with a short-term top in sight. There has not been any type of significant pull-back in this market and we are due for one, but I would expect continued strength in soymeal futures into 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.
Hog Futures Extend Rally on China’s Pork Buying
Hog futures have extended their recent gains today on news of decreased Chinese pork output. Hog futures are up $2.17 today currently trading at $90.00 per cwt at the Chicago Mercantile Exchange.
Farmers in China reportedly decided to cull their herds thereby shrinking pork output as corn costs to feed their animals became too expensive. This has caused a rollover effect for more pork imports which has been estimated to be as much as 5% of US production this year.
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, shared his fundamental view of the hog futures market by stating, “China’s insatiable demand for pork runs deep in their culture.” Brady adds, “This comes at a time when the piglet-killing disease two years ago forced domestic culling and we’re trying to rebuild our domestic herds.”
Hog futures have resumed their uptrend only recently. There is no top in sight for this market so expect prices to be passed on to the consumer.
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: Soymeal, Crude Oil, Sugar, Soybeans, Corn, Russell 200 Index and Cotton, Lean Hogs, Kansas Wheat, Natural Gas, & CBT Wheat (These five new this week.)
DOWN Trending Futures Markets: High-Grade Copper & Feeder Cattle (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.
Flourishing Market Makes Sugar Futures at Risk for Sell-Off
Sugar futures extended their gains only slightly today but one bank warns of heavy fund activity making sugar vulnerable to a sell-off. Sugar futures are up 5 points today currently trading at .1966 per pound at the New York Intercontinental Exchange.
Even with increasing expectations for next season’s sugar deficit, a prominent Dutch-bank feels strongly the sugar market sentiment has been exaggerated much ahead of the fundamental situation. Any shift in production at this point – the bank points out – could encourage a “rush for the exit” in this heavily top-heavy market.
Laura Taylor, a senior market strategist at RJO Futures in Chicago, shared her fundamental view of the sugar futures market by stating, “The fundamental situation reportedly supports higher sugar (futures) prices, but with no significant pull-back after a nickel rise I can understand the bank’s statements.” Taylor adds, “The .20c psychological price is fast approaching and if sugar futures were to sell-off, this may be the turning point price.”
The technical trend for sugar futures is up with no top yet in sight. Sugar futures have accelerated almost two-cents ahead of it 18-day moving average, so we can easily see a pull-back to the mid-.17c level (in my study).
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 Soar as Vietnam’s Output Looking Bleak
Coffee futures are reacting to news from SE Asia that Vietnam’s coffee harvest is expected to decline to a four-year low amid reoccurring dryness which threatens a further downgrade to overall production. Coffee futures are up just over .07 cents today currently trading at $1.3925 per pound at New York’s Intercontinental Exchange.
Vietnam mainly produces “robusta” coffee beans and the USDA’s Hanoi-bureau forecasts output there to drop by 7% for the 2016-17 season. What’s reportedly saving more of Vietnam’s coffee crop is the fact that farmers there have access to irrigation water from both reservoirs and underground sources.
The USDA-bureau in Hanoi, Vietnam, shared their fundamental view of the coffee futures market by stating, “Despite the dryness, damage to the 2016-17 crop during the key flowering and fruit-setting stage (from January to early March) has been minimal.” The USDA adds, “May rainfall… has been much lower than the same period in the last five years. The lack of May rain is adding stress to coffee trees. If the lack of rains continues in June coffee crops will face additional losses.”
Coffee futures trend has been choppy at best for the past six months. Just today coffee futures have broken out above a key resistance level turning the trend “up” in my work.
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.
Low Prices at the Pump Takes Gasoline Futures to Six Month High
Gasoline futures are down two weeks in a row after six-month highs were made just poor to Memorial Day weekend because of record usage and the lowest pump prices in a decade. Gasoline futures are down nearly .03c from last week currently trading at $1.5862 at the New York Mercantile Exchange.
The Energy Information Administration said today that gasoline usage which typically peaks between Memorial and Labor Day will average a record-breaking 9.5M barrels during the second & third quarters – up slightly from the prior May forecast. Gasoline prices have fallen from $2.63 this time last year. to a forecasted price of $2.27 per gallon for the 2016 driving season.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his fundamental view of the gasoline futures market by stating, “Despite crude oil prices grinding higher and record gasoline usage predicted, we’re seeing gasoline prices tapering off – disconnecting with crude you can say.” Craney adds, “Low gasoline prices alone are what’s driving the gasoline demand. People want to get out more if they can afford it.”
The technical trend for reformulated-blend gasoline futures is at a crossroad from being up at its high only three weeks ago. If gasoline futures were to extend their lows tomorrow, that could change the trend to down – a win for the consumer.
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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