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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:
USDA Raise Doubt Over Size of Brazil’s Crop as Soybean Futures Tumble
Soybean futures have taken a turn south toward 18-month lows & support as the USDA has recently stated the Brazilian soybean harvest is expected to fall short of the once anticipated 100M ton mark. Soybean futures are down .17 cents today currently trading at $8.67 per bushel at the Chicago Board of Trade.
The Brazilian soybean 2015-2016 harvest, which begins after Christmas, is now estimated by the USDA to be 98.5M tons which is still considered to be a record crop, but less than the 100M-101.9M tons estimated by government officials. Other professional analysts also called for soybean harvest figures there to be above the 100M ton estimates.
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 Brazilian soybean season started out with such dryness that it is surprising they’re still seeing a record crop.” Levy added, “They’re getting the need rains at this point in the soybean growing season, but will the drier growing regions get the necessary moisture is now the question.”
The trend for soybean futures has accelerated downward today. Soybean futures have a pretty good support level just above the $8.50 level, below that is open territory.
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.
Crude Oil Futures Hastily Retreat on Profit Taking
Crude oil futures have given back most of yesterday’s gains, but losses may be limited due to disruptions in supply from Brazil and Libya. Crude oil futures are down $1.62 at this time currently trading at $46.28 per barrel at the New York Mercantile Exchange.
There’s a strike happening with Brazil’s state-run oil producer causing a reportedly 25% disruption for the world’s ninth-biggest oil producing nation. In Libya, one of their oil export terminals is closing and both of these situations are helping to support crude oil prices today.
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, shared his fundamental view of the crude oil futures market by stating, “Crude oil (futures) traders are most likely either taking temporary profits, or establishing new short positions after a five dollar rally.” Brady added, “With a strong US Dollar still prominent and persistent fragile economic data coming out of China, its hard to imagine crude oil (futures) prices rally much from here.”
Crude oil futures trend is down, however range-bound for the last two months. Crude oil futures had found a recent low near $43 early last week from their recent $51 high early last month so these are the parameters for consumers and traders to watch.
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.
Fifth Losing Session Sees $60 Gone From Gold Futures
Gold futures have spiraled lower since their mid-October $1,190 per ounce highs with investors continuing to cut holdings of the precious metal because of the outlook the Federal Reserve will raise interest rates next month during their next meeting. Gold futures are down $17.50 today currently trading at $1,118.40 per ounce at the New York Commodity Exchange.
Gold futures were in an overall uptrend in the past three months with concerns of the global economic slowdown led by China’s flailing economy and the potential for it to negatively affect US growth. With the hawkish statement by the Federal Reserve Chairwoman last week, however, the entire mood was that of gold market traders pushing back and changing their mindset toward pushing for higher interest rates.
Laura Taylor, a senior market strategist at RJO Futures in Chicago, shared her fundamental view of the gold futures market by stating, “What we’re seeing in the gold (futures) market is proactive traders making the world’s ‘go-to’ hedge against inflation reflect conditions imposed by the feds.” Taylor added, “If the feds are not going to raise the interest rates, then the price of gold should be much lower in price – is the message.”
Gold futures trend is “down” as of yesterday (in my study) with no bottom yet in sight. Unless you are a professional trader, gold futures is a market right now that is best left alone until the dust settles.
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
DOWN Trending Futures Markets: Copper
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 Spiral Lower as Cancer Linked to Meat
Lean hog futures have made an astounding free-fall lower over the last seven trading sessions after a health warning pertaining to processed meats was publicized in the media earlier this week. Hog futures are down another $1.77 per pound currently trading at $59.62 per CWT at the Chicago Mercantile Exchange.
Hog futures were trading near $69 only last week, but the sudden drop in price is because of the perceived potential reaction to demand which has sent prices down almost $10 in such a short period of time. There are other circumstances that are attributed to the early decline of hogs such as a weaker domestic cash market, and USDA data showing record cold-storage pork inventories last month.
“After multi-month highs the hog (futures) market has been hit with a triple whammy,” said Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, sharing his fundamental assessment of the hog futures market. Medina adds, “The ‘trend is your friend until the end’ saying applies here as it looks like speculators and fund managers have just stopped buying.”
The trend for hog futures has just rolled over to “down” today in my work. Before professionals can do anything with this hog futures market it might require some sort of temporary relief rally happening first – keep away from the free-falling dagger.
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.
Warmer Weather Forecast Sends Natural Gas Futures Spiraling
Natural gas futures have been in a free-fall for the past week and have spiraled to the lowest levels in the last 3.5 years once recently updated weather forecast models showed unseasonably warmer than usual temperatures in much of the country through the end of next week. Natural gas futures are down .085 cents today currently trading at $2.276 per btu at the New York Mercantile Exchange.
The peak season for natural gas demand starts in November and lasts until March, but the outlook for natural gas speculators is bearish as there may be less demand for the product. Fueling this speculation is the view that the Energy Information Administration’s storage report due for release tomorrow is expected to show a build-up of 75B cubic feet through week ending October 23rd.
“This year’s weather has been abnormally warm in much of the country, and natural gas (futures) prices have reflected this last spring as well,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, sharing his fundamental assessment of the natural gas futures market. Craney adds, “With inventory levels expected to reach a record amount by the end of this month, it will be a plus for consumers hopefully throughout winter.”
Natural gas futures trend is down with no bottom yet in sight. It will take much for natural gas futures to change direction, it seems, at this point – however, the weather does change without notice…
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 Extend Gains Off Disappointing Start
Wheat futures saw higher prices as the news of the domestic wheat crop is making a far worst-than-expected start than was thought due to dryness. Wheat futures extended gains from yesterday before closing a cent-and-a-half lower near $5.075 at the Chicago Board of Trade.
The USDA recently rated the US winter wheat crop in good or excellent condition at 47% which was well below the 55% anticipated rating. The low ratings which were worst than others include Arkansas (26%), Colorado (38%), Missouri (34%), Oklahoma (31%), and Oregon rated the lowest at only “8%” amongst all winter wheat variety growing states.
“These USDA figures hit the wheat (futures) market as a complete surprise,” said Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, sharing his fundamental assessment of the wheat futures market. Plotkin adds, “Apparently drought is lingering on in America’s heartland, however there’s still about 20% more wheat to be planted so we shouldn’t read to much into this single report.”
The trend for winter wheat futures is mixed – soft-red variety still in a technical down-trend, while hard-red variety barely hanging on to its uptrend – so both at a crossroads. Before getting involved with wheat futures at this time I would suggest a clearer picture to unfold.
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: Lean Hogs, Sugar, Gold, Copper, Silver & Japanese Yen
DOWN Trending Futures Markets: Kansas City Wheat (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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