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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:
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.
Lack of Rain in Tropics May be Support for Coffee Futures
Coffee futures ended the day lower despite news from the Int’l Coffee Organization regarding lack of rain in both Brazil’s & Vietnam’s growing areas and even exports coming to a multi-year low. Coffee futures – despite bullish news – ended the day .047 cents lower trading at $1.24 per pound at the Intercontinental Exchange.
Supply expectations because of lack of rainfall in Vietnam ( the world’s top coffee producing country) and in Brazil’s premier growing region should lend support to robusta prices in the near future. The organization went on to say that, in Vietnam, coffee exports could drop to as low as 1M tons this year – export amounts not seen since 2008 according to Vietnam customs data.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his fundamental view of the coffee futures market by stating, “There is increasing alarming concern for robusta coffee supplies due to lack of rainfall.” Craney adds, “What coffee beans are coming out of Brazil’s next biggest region of coffee growing are said to be 10%-15% smaller than normal.”
The trend for coffee futures is at a crossroads…after finding lows in January an early uptrend emerged, however the rally came to an abrupt halt late last month and has not seen the needed followthrough to sustain the rally. Coffee futures remain in consumer favorable prices relative to the multi-year lows coffee prices are now.
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 as USDA Warns on Beef Prices
Cattle futures are lower across the board today as US agriculture officials suggest exports, rather than domestic demand, offer the industries brightest prospects. June live cattle futures ended the day down $1.52 trading at $117.05 per cwt at the Chicago Mercantile Exchange.
The USDA acknowledged the seasonal tendency for beef prices this time of year with barbecue season on the rise, but on the other hand they also stated “both supply and demand fundamentals are bearish for the beef complex.” Recent beef output is shown to be up 4% year-on-year, and also contributing to the bearish outlook the number of cattle slaughtered up 2.5%.
Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, shared his fundamental view of the cattle futures market by stating, “The cattle (futures) market was in bad shape coming into the year, and what rallies we have seen have been short-lived.” Plotkin adds, “This (cattle futures) market can sure use increased exports as its fast approaching last year’s low with cattle on feed report reflecting 100.8% last month versus 100.9% of all last year.”
Cattle futures trend is clearly “down” with no bottom yet in sight (in my studies). Cattle futures should find support another dollar (per pound) lower, but in the meantime maybe we can all benefit by getting the grill in use a little early this year and take advantage of the falling beef prices.
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.
With Dairy Outlook Quiet, Milk Futures Still Rally
Milk futures have extended their gains from the April 14th low, however overall dairy activity has not mirrored the action. Milk futures for June delivery was up .04 cents today trading at $14.02 (per cwt) at the Chicago Mercantile Exchange.
Along with milk futures, whole milk powder prices have been up 7.5% to their highest levels in three months, while skimmed milk powder has only rose 0.3% – cheddar cheese actually falling by nearly 4%. Production in New Zealand – the world’s top dairy exporter – remains robust despite most farmers there operating “in the red.”
Danielle Bourbeau, a commodity broker for Capital Trading Group in Chicago, shared her fundamental view of the milk futures market by stating, “Milk futures, however accelerating solely from overall dairy futures, shouldn’t be looked into much.” Bourbeau adds, “Global dairy markets may remain under heavy production, but we’re understanding overall demand is rather sluggish.”
The trend for milk futures is “up” from the overall picture March lows, but barely. I expect milk futures to test its March lows or continue with the overall downtrend should the $13.50 support area become compromised.
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 and Soymeal & Soybeans (New this week.)
DOWN Trending Futures Markets: British Pound and 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.
Interest-Rate Futures Lower After Former Fed Chairman Greenspan’s Statements
Treasury bond futures continued lower this week after former Federal Reserve Chairman Alan Greenspan spoke on CNBC and stated “monetary policy” has virtually run its course unless we reintroduce quantitive easing. The 30-year Treasury bond futures are currently down 25 points today currently trading at 165^03 per 100K face value at the Chicago Board of Trade.
Earlier this morning on CNBC’s “Squawk Box” IMF managing director Christine LaGarde said that negative interest-rates were creating a positive impact, but when the former Fed chairman spoke he publicly disagreed with her assessment. In case you have not heard, some European countries, Japan, and even big bankers in New York have decided to push interest-rates into “negative” territory – yes, you must pay the bank to hold your deposits.
“Monetary policy … has done everything it can unless you want to put additional QEs on. They’re not helping that much in the sense that ultimately determines whether or not you’re getting an effect from the QEs” (beyond increasing price-to-earnings ratios in the stock market),” said Alan Greenspan, former Federal Reserve Chairman for the Federal Reserve, sharing his fundamental assessment of the interest-rate futures market. Greenspan added, “There’s no real evidence that we’re getting an impact on lending and on the economy picking up.”
The trend for interest-rate futures is technically up, however stagnant & sideways. Interest-rate futures will eventually breakout one way, or another, but with the economy flat as it is, it feels more like a “calm before the storm.”
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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