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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:
Wheat Futures Hit Two-Month High, Reverse Course After USDA
Wheat futures reached highs not seen since early April in its renewed uptrend, and just before the monthly USDA Crop Production was released. Wheat futures did an about-face just prior to the report and closed down almost .20 cents for the day just below $5.13 per bushel at the Chicago Board of Trade.
The trade expected the USDA to raise their estimates for both corn and wheat supplies, and lower the outlook for soybeans in this current crop season. The released estimates for these markets were indeed confirmed, but the market sold off thereafter.
“It’s a typical case of ‘buy the rumor, sell the fact’ with this wheat market today,” said Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, sharing his view regarding the fundamental assessment of the wheat futures market. Plotkin added, “The recent rains in the Central Plains and how it may affect the wheat market still cannot be overlooked.”
The trend for both hard & soft-red winter wheat is up with soft-red stronger of the two. In my view, the wheat market’s rallied early this year due to the heavy rains in the Central Plains – prime wheat growing country and the result of these down-pours still has yet to be seen…
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.
Avian Flu Proving to Disrupt Domestic Egg Prices
Egg prices around the country may be on the rise, if you haven’t noticed already. A major Texas-based national grocer is putting up signs around their 350 supermarkets preparing customers to ration eggs because of the Avian Flu.
Once thought as lethal in other parts of the world, Avian-flu is reportedly spreading around the country to a point of national crisis. According to the USDA, as of this month there have been 46M chicken and turkey’s affected, 80% of which are said to be egg-laying hens!
Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, shared his view regarding the fundamental assessment of the dairy futures market by stating, “I would expect this crisis to affect the food processors (and their customers) more than the consumers of actual ‘in-shell’ eggs itself.” Evans adds, “It’s the cost of processing egg-products that has made egg-based food products 2.5 times the price since this scare started, less than the USDA’s reported egg prices ‘just about doubling’ during this same period.”
Dairy prices affect most consumers, especially those raising families. Egg prices are outside of the three-year price average for this time of year, unfortunately with no top yet in sight.
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: Soy Oil (New this week.)
DOWN Trending Futures Markets: Corn, Soymeal, Soybeans, Japanese Yen & Coffee (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.
Wheat Futures Higher With Continued Short-Covering, Winter-Wheat Concerns
Wheat futures have resumed their rally after a day’s break with short-covering momentum returning to challenging their recent highs. July CBT Wheat futures are currently up .12 cents near their high of the day as of this writing at $5.23 per bushel at the Chicago Board of Trade.
US winter-wheat prices are up an average 9% from last week with the last of the bearish holdouts and renewed concern over the health of this year’s winter wheat crop. The USDA actually downgraded the the rating of our domestic winter-wheat crop from 45% (week before last), to 44% just recently.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her view regarding the fundamental assessment of the wheat futures market by stating, “This year’s wheat (futures) prices seem to be marching to a different drummer by bucking the overall fundamental picture.” Levy adds, “The same group (the “USDA”) that downgraded the rating by 1% measly percent also upgraded spring-wheat by the same 1% but reported 91% of crop emergence – improving from 80%.”
Winter wheat futures trends are mixed at this time although the chart action appears to be similar. Taking a closer look…soft-red’s trend is down, while hard-red’s is up in my study of these markets. During times like this – when markets seem to disconnect – it is best to step aside until a clearer picture emerges.
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.
Upbeat Employment & Trade Data Not Enough for Gold Futures
Gold futures fell today to lows not seen since early last month on the outlook of positive data making the case for an interest-rate hike this year. Gold futures are down $8.60 currently at $1,185.80 per ounce (but traded to $1,180 earlier in the trading session) at the New York Commodity Exchange.
The US Commerce Department reported the trade deficit narrowed close to 20% in April exceeding analysts expectations, while in the same month US exports ticked up a full 1% and imports declined 3.3%. This information came before the payroll processing firm “ADP” stated May non-farm payrolls rose a hair above expectations to 201,000 with the economy creating 165,000 jobs.
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, shared his view regarding the fundamental assessment of the gold futures market by stating, “With this most current information, the case is indeed made for interest-rates to be increased by the monetary policy makers (the Federal Reserve board).” Brady adds, “Fridays official employment data could be what the gold traders are waiting for to get this market kick-started.”
The trend for gold futures has been absolutely sideways for 2.5 months while technically “up” in my work. A couple more down days from here could change the trend from up to down, however – today’s/tomorrow’s lows must hold.
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.
Grain Futures Rise Despise Ideal Weather, Planting Progress
Grain futures are higher today on what is reportedly said to be “short covering” – traders unwinding “bets” that grain prices will fall further. Soybean futures lead the way (so far) up .15 cents for the day near their high of $5.09 per bushel at the Chicago Board of Trade.
The USDA said yesterday that most of the crops (spring & winter wheat combined), corn & soybeans have been planted, and emergence coming along greatly. Gov’t figures show corn to be the US’s biggest crop, then soybeans, and then wheat (actually behind #3 – “hay”).
Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, shared his view regarding the fundamental assessment of the grain futures market by stating, “Some of these grain (futures) markets appear to have been ‘basing’ for some type of relief rally.” Medina adds, “It will take more market action for corn and soybeans to roll-over into an uptrend, however, and for the wheat markets to decide which way they will trend.”
As mentioned above, the trends for corn, soybeans, and CBT Wheat remain down (while KCBT Wheat is actually “up” in my work). This is the time of year when corn and soybeans rally into the fourth of July period, however, this is a different year than others with ample supply in each of these markets already a factor.
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: Feeder Cattle & Silver (New this week.)
DOWN Trending Futures Markets: Corn, Soymeal, Soybeans & Japanese Yen (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.
Domestic Planting Progress Holds Corn Futures Near Seven-Month Low
Corn futures retreated after extending yesterday’s lows to prices not seen since late September/early October on signs of speedy planting progress in the nation’s Midwest corn-belt. Corn futures have since reversed higher and are currently up .035 cents at $3.525 per bushel at the Chicago Board of Trade.
The USDA reported approximately 92% of the domestic corn crop planted as of May 24th – well ahead of the 88% five-year average. Corn emergence also spiked to 74% from 56% only the week before (well ahead of its 62% five-year average).
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his view regarding the fundamental assessment of the corn futures market by stating, “The farmers have done everything they can to get ahead of this unpredictable weather, and its really reflective in the corn (futures) prices.” Craney adds, “Should the weather continue to be favorable for growing (corn), the market may also be factoring in more supply atop ample inventory.”
The trend for corn has resumed down after trading sideways for most of the month of May. No sign of a bottom at this time, but corn futures is only a mere few cents away from its October 1st 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.
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