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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:
With Chinese Auction Inventory Low May be a Boost for Cotton Futures
Cotton futures are finding support today after the Int’l Cotton Advisory Committee announced an expectation for Chinese cotton stocks to fall to a five-year low once the government auctions off its sizable reserves. Cotton futures are down 70 points today currently trading at .6208 per pound at the Intercontinental Exchange in New York.
The Chinese government made this decision reportedly because of falling domestic production brought on by declining Chinese demand, and a sharp decline in imports. The Int’l Cotton Advisory Committee says they expect Chinese inventory to drop by 7% this fiscal year, and another 10% next fiscal year.
“China had been holding and hoarding cotton in an effort to fix global prices and this is said to have been weighing on global markets,” said Danielle Bourbeau, a commodity broker for Capital Trading Group in Chicago, sharing her fundamental assessment of the cotton futures market. Bourbeau added, “This massive dump of inventory should shake-up the cotton (futures) market pretty good.”
Cotton futures trend is up with the market looking as if its finding resistance at 4th quarter 2015 previous highs. Cotton futures may be adjusting for this forthcoming cotton auction in China.
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 Commodity Futures Markets Put Stocks in the Backseat
China’s formidable $5.9 trillion stock market has been left in the dust recently as Chinese speculation has been giving global raw commodity markets one heck of a ride this past month or so. Metal futures, food & fiber futures, and grains have all turned up with trends from being stagnant since early 2015.
Everything from eggs, to cotton…even steel rebar has been surging as the speculation bug in China has been catching on. There is no joke when mentioning “eggs” because when compared to the stock market, the dairy staple has indeed been a better investment in China with egg futures climbing 27% so far this year.
Mark Mobius, executive chairman for the Templeton Emerging Markets Group, shared his fundamental view of the Chinese commodity futures market by stating, “We have already seen how both commodity prices and the commodity stock prices went down too far, beyond realistic assessments.” Mobius adds, “We can now expect movement on the upside to be extreme in percentage terms.”
The trends for most of the commodity futures markets has turned up with the exception of cattle futures and coffee. With the dizzying speculation going on in China’s commodity futures markets, it seems only a matter of time before these markets are discovered too.
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 Than Expected Stocks Setback Sugar Futures
Sugar futures have reversed course after an emerging uptrend Friday once USDA officials came to the conclusion sugar stocks will hit a nine-year high. Sugar futures are down 15 points today currently trading at .1606 per pound at the Intercontinental Exchange in New York.
It is estimated European Union sugar production will increase by 17% in the forthcoming season to 17.4M tons – 900T tons of it intended for commercial use – which compares to the EU’s estimate of 17.6M tons. The USDA Brussel’s bureau, however, revised down the current marketing year’s ending stocks to 1.27M tons, but still 562T tons greater than the official USDA estimate.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her fundamental view of the sugar futures market by stating, “What is not being mentioned is the heavy carryover of sugar stocks from the bumper crop 2014-15 season.” Levy adds, “We may be seeing higher sugar (futures) prices because of the overall global shortfall in production this season.”
The technical trend for sugar futures has turned “up” late last week. Sugar futures will need to breakout above .17c per pound and demonstrate follow-through for the uptrend to most likely be sustained.
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: Japanese Yen, Gold, Natural Gas, S&P 500 Index, Euro-currency, Soymeal, Soybeans, Crude Oil, Silver, Corn and Sugar & CBT Wheat (Both new this week.)
DOWN Trending Futures Markets: Kansas Wheat
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.
Gasoline Futures at Three-Month High Amid Record Demand
Gasoline futures have reached three month highs this week on reportedly record demand. Gasoline futures are down a mere 22 points today currently trading at $1.5925 per gallon at New York’s Mercantile Exchange.
The world’s biggest oil producers are said to have failed in agreeing to an oil output freeze at a time when domestic gasoline demand is surging. With the American peak summer driving season still approaching, US gasoline consumption rose to 9.25 million barrels a day in March – an all-time high for that month – according to the American Petroleum Institute this time last week.
Scott Roberts, co-head of high yield investments and manager of $2.7 billion at Invesco Advisers Inc. in Atlanta, shared his fundamental view of the gasoline futures market by stating, “It doesn’t make sense to go short ahead of summer because of strong gasoline demand.” Roberts adds, “Refiners are coming back and with that crude demand.”
Gasoline futures is up with no top yet in sight one month ahead of the Memorial Day weekend peak driving demand holiday. Even with record demand, gasoline futures remains well below “war-era” prices and I wouldn’t be surprised to see even lower gasoline prices at the end of the year.
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.
As Asian Grind Rises, Cocoa Futures Rally
Cocoa futures have extended their 2016 gains today amid Asian grinders reporting higher-than-expected volumes. Cocoa futures are down 22 points, however, currently trading at $3,189 per ton at New York’s Intercontinental Exchange.
Grinding – looked upon as a way to gauge consumer demand – came in at nearly 149 tons which was up nearly 3% in the first quarter compared to the same time last year, according to the Cocoa Association of Asia, and 1% better than expected. This news has caused cocoa futures to rally nearly 10% since earlier this month.
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, shared his fundamental view of the cocoa futures market by stating, “The cocoa market is reportedly seeing an uptick in Asian grind, and disappointing arrivals in the Ivory Coast.” Brady adds, “Since January the pace is said to be down about 7% year on year. Just enough to be significant.”
The trend for cocoa futures is up with no top yet in sight. At this rate of strength, cocoa futures could easily test the past two years high’s by the end of Spring.
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 Lower as Outlook Points to Cooler Temperatures
Natural gas futures extended its sell-off from yesterday reportedly as forecasts predicted for cooler temp’s in the heartland to the eastern regions are driving prices lower. Natural gas futures are down 34 points today currently trading at $2.153 per btu at New York’s Mercantile Exchange.
This is the time of year when natural gas traders try to determine spring gas demand by closely monitoring weather forecasts just before warmer weather increases demand. Warmer weather in the southern states is cooling and models now predict “mostly average to below normal temperatures” in the continental 48 states.
Laura Taylor, a senior market strategist at RJO Futures in Chicago, shared her fundamental view of the natural gas futures market by stating, “It’s not long until the gas-fired electrical demand is here.” Taylor adds, “The natural gas trade is eager to get this market going, but a sustained demand outlook is what most needed.”
Natural gas futures trend is slightly bullish. After this recent sell-off it appears natural gas futures is prime for another spike higher, but for consumers the energy prices are still relatively low.
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: Japanese Yen, Gold, Natural Gas, S&P 500 Index, Euro-currency, Soybean Oil, Soymeal, Soybeans and Crude Oil, Silver & Corn (These three new this week.)
DOWN Trending Futures Markets: Feeder Cattle and Kansas Wheat & Live Cattle (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.
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