The Official Brian Schad Commodity Futures
& Options Trading Corporation Website
Commitment to Trading Excellence
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:
Dairy Price Revival Dampens with Strong Production: Milk Futures
Milk futures are forecasted to remain weak until late next year as long as strong milk production continues in the EU – putting a damper on any revival in the dairy markets. Milk futures are down .05 cents from last week’s close, currently trading at $14.52 per CWT at the Chicago Mercantile Exchange.
A prominent Dutch agri-bank forecasts whole milk powder will not return to $3,000 per ton until late next year. It was just October of 2014 when milk prices were at their height of $24.50 per CWT (which translates to $2,450 per ton on the American market).
Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her fundamental view of the milk futures market by stating, “Much of this downturn on milk (futures) prices may be from China previously hoarding milk, to now dwindling down their supplies.” Levy adds, “They are learning what was popular in the USA in the 70’s with stretching supplies with dry milk powder – a fast faded trend.”
The trend for milk futures is down with no bottom yet in sight. Milk futures may be providing a gift for young families with hefty milk drinkers, so enjoy these low prices while we can.
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 on Weak Price Outlook
Live cattle futures ended the day lower after the USDA issued a statement saying “depressed prices are expected to carry into 2016.” Live cattle futures ended down $1.025 per pound today settling near $124.50 per CWT at the Chicago Mercantile Exchange.
The pendulum does swing the other way as just last year it was the feedlots and packers making the money from high beef prices, but now the retailers are finally being handed significant margin opportunities due to beef market dynamics and cattle prices near three-year lows. This downgrade from the USDA was just issued last week when the statement was made for the benchmark fed steer values..
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, shared his fundamental view of the cattle futures market by stating, “Beef prices (cattle futures) have been steadily working its way downward since summer, but accelerated lower in early November.” Brady adds, “Hopefully a strong US Dollar will help boost needed beef exports to stabilize this market.”
Cattle futures trend is down with no bottom in sight. Cattle futures are supposed to “predict” where beef prices are headed, so this is a plus for consumers as well as families.
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.
Analyst Group Boosts Global Deficit Forecast Lifting Sugar Futures
Sugar futures initially lifted-off today after a prominent analyst group increased their estimates for global sugar production making next season an eight-year high. Sugar futures has since backed-off and is only up 8 points for the day currently trading at .1459 cents per pound at the Intercontinental Exchange.
The sell-off in oil prices may also be contributing to the underlying value of certain commodities such as sugar – used to make biofuel. Sugar has been fluctuating around its 18-day moving average for well over a month now.
Laura Taylor, a senior market strategist at RJO Futures in Chicago, shared her fundamental view of the sugar futures market by stating, “The sugar market has been indecisive since early November.” Taylor adds, “Maybe this news is what the sugar trade has been looking for but only time will tell.”
The technical trend for sugar remains “up,” however at a crossroad with yesterday’s probe lower. If sugar futures can break below yesterday’s low (.1423) before reaching back up to its moving average (.1507) first, then that can change the trend to down.
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 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: Sugar, Cocoa, S&P 500 Index & Soy Oil (Both new this week.)
DOWN Trending Futures Markets: Feeder Cattle, Soymeal, Gold, and Crude Oil, Kansas Wheat, and Live Cattle (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.
Wheat Futures Higher Despite French Winter Wheat Plantings
Wheat futures are higher today (after the USDA crop production report) despite French farmers ramping up planting in the biggest area since 1936 – this after an all-time high bumper crop. Wheat futures ended the day up nearly .09 cents trading at $4.905 at the Chicago Board of Trade.
The French Agricultural Ministry reportedly stated that winter wheat sowing’s area had increased “in most French regions, and especially in the Loire Valley,” which is said to have increased by almost 5%. The increase of wheat plantings come at a time when the European Union was expecting a slight drop due to the popularity of the grain.
“If the French wheat forecast is correct, then another all-time bumper crop can be expected next year,” said Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, sharing his fundamental assessment of the wheat futures market. Medina added, “Apparently the wheat used to make pasta is the favored variety.”
The trend for wheat futures is down, albeit sideways for the past four months with little direction. The time is right with wheat futures weakness for food processors to take a look at the bigger picture for marketing their products.
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.
Decreased Incomes May Make it Difficult for Farmers to Hold Back Supply: Grain & Livestock Futures
Grain and livestock futures may find even lower prices ahead as falling incomes here in the US may make it difficult for producers to retain much of their stocks in order to await grain & livestock prices to recover from these current low levels. Grain futures are anywhere between “unchanged” to down .06 cents trading today at the Chicago Board of Trade.
The USDA stated last month that due to weaker crop and livestock prices, domestic farm incomes are expected to drop this year to a 13-year low. If that’s not enough, our strong US Dollar and plentiful global supplies have also dragged down world food prices – reportedly 18% lower prices than last year at this time.
“Farmers and ranchers usually hold back a percentage of their supply when commodity (futures) prices are low as we have seen lately,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, sharing his fundamental assessment of the grain futures market. Craney added, “When you take into account, however, the incomes of producers which are expected to be limited, it may be difficult for them to hold back from selling to get all they can to pay their bills.”
Grain and livestock futures trends are mainly down (only soybean futures have turned up recently) with no bottom yet in sight. Grain & livestock futures can see technical rallies in markets like this, but with incomes down across the land, prices for consumers should continue to fall at the grocery stores.
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: Sugar, Cocoa and S&P 500 Index & Soy Oil (Both new this week.)
DOWN Trending Futures Markets: Feeder Cattle, Euro-Currency, Soymeal, Gold, British Pound, and Corn
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 Only Budge After Supply Fall
Natural gas futures data shows domestic natural gas supplies have fallen for the first time this season, but are little changed after the announcement. Natural gas futures are up 16 points currently trading at $2.181 per BTU at the New York Mercantile Exchange.
There was an expectation for a 51B cubic-feet decline in supplies, but the US Energy Information Administration stated in its weekly report that domestic natural gas inventories actually fell by 53B cubic-feet in the week ending last Friday (Nov 27). The five year average for the week is actually a set-back of 50B cubic feet.
“The natural gas storage drawdown is merely a little more than usual,” said Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, sharing his fundamental assessment of the natural gas futures market. Plotkin added, “The natural gas trade, I suspect, will be monitoring for a pattern of more than usual or unexpected set-backs in supply to possibly turn this market around.”
Natural gas futures are in a down-trend with new lows being made just today – so no bottom in sight. Natural gas consumers can enjoy these low prices, but for how long nobody can say for sure.
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.
Recent Comments