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:
El Nino Drought in South Africa Bringing Record Grain Imports
Grain markets are reacting to one the worst droughts on record in South Africa causing a reported 25% slump in corn and wheat grain output this year. Grain futures – both corn & wheat – are both trading down today at the Chicago Board of Trade.
The USDA bureau in the northern part of the country has now determined a 3.0M ton estimate for the country’s corn import for the year starting in May – twice the amount of a prior estimation. For wheat, a record 2.0M ton amount of wheat is said to be imported for the same year.
Danielle Bourbeau, a commodity broker for Capital Trading Group in Chicago, shared her fundamental view of the grain futures market by stating, “What is happening at the southern tip around the other side of the world is proof of El Nino’s global outreach.” Bourbeau added, “Here in the Northern Hemisphere we are seeing much wet weather, however on the opposite side of the globe the hot and dry conditions are making crop prospects very much unfavorable.”
Corn and wheat futures trends may be technically “up” at this time, but sideways would be a more accurate way to look at their daily trend. If other places in the Southern Hemisphere are experiencing similar hot & dry weather, then many countries may be doing their grain futures market shopping right here in the USA – we have plenty to provide.
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.
Soybean Futures at a Standstill as Argentine Farmers Defy Selling Expectations
Soybean futures have much global inventory to unload, but in Argentina there is a reported 12M ton supply that isn’t exactly flying off the selves because farmers there are holding out. Soybean futures are down .11 cents today currently trading just above $8.75 per bushel at the Chicago Board of Trade.
Argentine farmers are said to be reluctant to sell down their soybean stocks as they were reportedly built up in the first place as a hedge against the possibility of their currency’s peso downfall. Recently the peso crashed by more than a third versus the US Dollar in one day, and has been on a more controlled decline since.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her fundamental view of the soybean futures market by stating, “The soybean exports and selling from Argentina has defied expectations because of such a large stockpile there.” Levy added, “The soybean (futures) trade has been looking for direction for some time now and this situation in South America adds more uncertainty to the overall outlook.”
Soybean futures trend – although technically “up” at this time – has actually been sideways in nature since late August. I have to believe at these soybean futures discount prices that nations are seeking out good trade value because we’re coming up on the time of year we should see soybeans rally.
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 Clamping Down on Grain Deliveries Puts Pressure on Wheat Futures
Wheat futures did an about-face downward today after it was revealed the country of Egypt – the world’s top wheat importer – is refusing grain shipments with a “zero-tolerance” policy over a fungal residue that causes hallucinations if ingested in sufficient quantities. Wheat futures ended the day mixed near unchanged after rallying .07 cents above the open at both the Chicago & Kansas City Board of Trade today.
“Ergot,” a common infection found in grains, has been declared an enemy of the Egyptian agricultural authorities refusing to accept grain shipments with even a trace amount. This is a change in Egyptian policy when previously it would accept reportedly ergot levels up to one-twentieth of 1%.
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, shared his fundamental view of the wheat futures market by stating, “Its bad enough the wheat (futures) market has been trading sideways for the past two-and-a-half months. Now the wheat trade may need some kind of clarification on grain’s export rules.” Brady added, “This can potentially keep the wheat (futures) market trading sideways for an undefined prolong period of time.”
The trend in wheat futures is technically “up” at this time after finding a low only this time last month at the $4.56/bushel area. These low wheat futures prices bode well for consumers all over the world, but they low prices unfortunately don’t last forever…
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: Natural Gas, Japanese Yen and 10yr. T-Notes (New this week.)
DOWN Trending Futures Markets: Soymeal, Russell 2000 Index, British Pound, Cocoa and Cotton & Copper (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.
Natural Gas Futures Find Support After Domestic Storage Data
Natural gas futures may have finally found solid support as freezing temperatures across parts of the country have boosted demand. Natural gas futures are up almost one-half cent today currently trading at $2.205 per BTU at the New York Mercantile Exchange.
Today the US Energy Information Administration announced natural gas storage in the week ending last Friday declined by 211B cubic feet – compared to expectations of only 207B. This is reportedly the biggest drop in natural gas storage since February of last year.
“The big question for natural gas (futures) now is how is the weather forecasted to behave next, followed by where is the real support for this market?” said Laura Taylor, a senior market strategist at RJO Futures in Chicago, sharing her fundamental assessment of the natural gas futures market. Taylor added, “The natural gas trade had been dropping to the lowest prices ever and this technical bounce higher puts the trade at a crossroad.”
Natural gas futures appear to be in an early phase of a possible uptrend. However, consumers can be confident natural gas futures may require more fundamental changes to reverse and sustain higher – still too early to tell.
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 Bearish Bets Cut by Hedge Fund Managers: Commodity Futures
Agricultural commodity futures bearish bets by hedge fund managers have become less aggressive for the first time since Christmas – with an exception of wheat futures. Grains are mixed across the board today – soybeans up, wheat down, and corn unchanged at the Chicago Board of Trade.
Early last week data from the Commodity Futures Trading Commission revealed “large speculators” (managed money) slashed their net “short positions” by over 87,000 contracts in both futures & options of the top 13 domestic agricultural commodity markets. The bearish bets by hedge funds had actually been building for the past four weeks before pulling positions.
“The grains have led the agricultural commodity sector out of the bearish attitude of the professional money managers throughout most of the month,” said Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, sharing his fundamental assessment of the agricultural commodity futures market. Medina added, “This comes simultaneously when the Commodity Research Bureau’s index reached its lowest point since March 2002 also (last week).”
The grain markets have mixed trends, but the softs are now all down and cattle is down, but hogs are up. In my view, the agricultural commodity markets have been providing value for potential customers, but eventually a buying attitude prevails to end bear markets.
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 Higher as Outlook for Demand Rises
Corn futures may be projecting demand as a major bank declares domestic corn sowings will remain steady with last year’s thanks to appealing economics. Corn futures are up .02 cents at this time currently trading at $3.715 per bushel at the Chicago Board of Trade.
Corn sowings in 2015 were at/near 88M acres and despite corn yields expected to be 10% less than the year before because of planting in a second year running, corn is expected to be a better choice cash crop. Corn is winning the acreage by holding steady as soybeans and wheat are expected to lose acreage.
“Clearly farmers are gauging the price ratio of corn versus other crops and/or grains,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, sharing his fundamental assessment of the corn futures market. Craney added, “Farmers only have so much land – and they’re not only making hay – so they want to find the most profitable crop for the next harvest.”
Corn futures trend (on daily charts) have recently shown signs of a potential uptrend forming. We can expect corn futures to test the early month $3.50 lows hopefully soon.
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: Natural Gas and Japanese Yen
DOWN Trending Futures Markets: Soymeal, Russell 2000 Index, British Pound and Cocoa
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