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 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:
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.
2016 Crop in Brazil Can Be a Record High, Bust For Coffee Futures
Coffee futures continue to find lower lows as officials in Brazil are encouraged by favorable weather in the top arabica-coffee growing regions and claiming they can see coffee output spike to up to 58% – a record high. Coffee futures are up .025 cents today (after finding a new contract low only yesterday) and currently trading just above $1.14 per pound at the Intercontinental Exchange based in Atlanta.
Brazil’s top agriculture bureau has reportedly estimated this year’s coffee harvest to be between 49.1-51.9 million bags which could potentially top the record 50.8M bags realized in 2012. The worst coffee production estimate still comes in near the second best harvest only three years ago before the drought conditions appeared in early 2014.
“Brazil is in the midst of a sharp rebound in coffee production thanks to the favorable weather in their top-producing growing regions,” said Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, sharing his fundamental assessment of the coffee futures market. Plotkin added, “The country is reasserting their dominance as the world’s top coffee producing country after a dismal 2015.”
The trend in coffee futures is down with no bottom yet in sight. It will take much fundamental change for coffee futures to turn things around, but a major plus in keeping prices low for coffee enthusiasts all over the world.
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 Resilience May Be Felt by Low EU Feed Volume
Hog futures newfound strength may be tied with what is going on with the pork industry in the European Union – a decade low feed demand poised for another significant decline. Hog futures are down .42 cents today currently trading at $67.30 (CWT) at the Chicago Mercantile Exchange.
There is reportedly a contraction happening in the EU pork industry in part by Russia banning imports which is helping to cause compound feed used by pig farmers to be expected to drop 2-3% this year. Hog prices in the EU – according to the government’s reference price – touched a 10-year low of E126.02 per kilogram just last month.
“While the European Union continues to see hog (futures) prices falling, here in Chicago a support-base had been made between mid-November to mid-December and has been rallying since,” said Danielle Bourbeau, a commodity broker for Capital Trading Group in Chicago, sharing her fundamental assessment of the hog futures market. Bourbeau added, “This reflection in demand can only mean one thing: our US hog (futures) market is preferred over the EU pork industry.”
Hog futures trend is up since early this month. This could be a technical bounce for hog futures in an overall down-trend, but right now pork prices are in the middle of six-month highs and lows.
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.
Chinese Economy Weighing on Int’l Dairy Futures
Milk futures and other dairy products are lower from the Global Dairy Trade Auction on the outlook of the Chinese economic slowdown. Milk futures (Feb) are currently down .45 cents (per CWT) trading at $13.73 at the Chicago Mercantile Exchange.
Every two weeks these auctions are held in the biggest dairy product producing nation (New Zealand) serving much of Asia and Oceania. The most current auction saw prices down 1.4% than the prior event two weeks ago, and is now being perceives as possible demand outlook uncertainty.
“When your biggest customer is ordering less dairy products, it is a pretty good barometer of the economic health of that nation,” said Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, sharing his fundamental assessment of the dairy futures market. Evans added, “Dairy products are still in demand around the globe, but what we may be seeing here is a demonstration of fair value in (dairy price) discovery.”
The trend for milk futures is clearly down since October, but at a possible crossroads. If milk futures continues with higher highs tomorrow it can possibly change the near-term trend outlook to up.
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