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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:
Plantings Nearly Complete and Emerging Weigh on Wheat Futures
Wheat futures are testing last weeks lows one day after the release of the USDA crop production report and earlier reports of domestic spring wheat planting near completion. Wheat futures are currently down .08 cents today near $4.725 cents per bushel at the Chicago Board of Trade.
A total of six states where 99% of the 2014 spring wheat crop domestic crop was planted are now reporting near completion and well above their five-year average for plantings. The five-year average of 51% of the spring wheat crop planted is being surpassed and currently at “87%” as of May 10th reporting.
“With spring wheat near completion so early its no surprise to learn a 54% ‘emerging’ so soon in the season,” said Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, regarding the fundamental assessment of the spring wheat futures market. Plotkin added, “With favorable weather forecasted, wheat farmers are adding more supply to plentiful stocks.”
The trend for wheat futures continues to be down with the market currently testing the May 5th low. With no bullish news in sight, it will be interesting to see how wheat negotiates heavy support .12 cents lower.
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.
Cotton Futures Find Two-Week Low Despite Planting Lag
Cotton futures have plummeted to two week lows and are more than 350 points from their early month highs despite USDA reports of cotton planting behind their five-year average. Cotton futures fell another 75 points today to $0.6464 cents per pound at the New York division of the Intercontinental Exchange.
There are 15 states where 99% of the 2014 cotton crop was planted and some states such as Arizona, Arkansas, and Mississippi are well above the five-year average for plantings. Even when these states are averaged with the other 12 states, the five-year average of 32% of the cotton crop planted is only sitting at “26%” as of May 10th reporting.
“The cotton (futures) market has been up and down like a yo-yo since January,” said Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, regarding the fundamental assessment of the cotton futures market. Evans added, “If the significant lagging in planting can’t turn this market around, supply may very well be the underlying concerning issue.”
Despite the recent drop in cotton futures this month, the trend remains up in my study. I would think support for cotton futures should be near-by.
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.
Strong Jobless Claims, Interest-Rates Weigh Heavy on Gold Futures
Gold futures retreated from the $1,200 per ounce high from Tuesday after a reportedly stronger than forecasted US jobless claims data was posted. Gold futures are currently down $8.00 at nearly $1,183 per ounce at the New York Commodity Exchange.
The surprise with the Department of Labor statistics report this morning was with a number of other statistics in the report nearing a 15-year low, including the four-week average for initial claims reportedly dropping by 4,250. Interest-rates, on the other hand, have been weighing on gold prices with rates creeping higher in the last week.
“(Gold) traders are most likely ‘squaring-up’ positions ahead of tomorrow’s big monthly employment report,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, regarding the fundamental assessment of the gold futures market. Levy added, “Gold futures have been lacking direction for more than a month now, perhaps awaiting how employment figures and interest-rates will unfold.”
The technical trend for gold remains “up” in my study but have been at a cross-roads twice in the last two weeks. Gold futures – at the moment – appear range-bound within a high of $1,217 on the high side, and $1,170 on the lower support level.
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.
Soybean Futures Initially Rise With Soy Oil Demand
Soybean futures initially rallied for a third straight trading session with the strength of soybean oil demand, but both markets have since retreated and are just below unchanged as of this writing. Soybeans reached a price of $9.90 per bushel earlier in the trading session when soybean oil futures extended their three-day gain at the Chicago Board of Trade.
Soybean futures is considered the “parent” contract of both its by-products – soybean oil, made from pressed soybeans, and soymeal, the left-overs once the oil is removed used for livestock feed. The rally and demand of soybean oil was up as much as 6% twice this week.
“Soybean oil (futures) can very well be leading the pack with talk of strong overseas demand,” said Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, regarding the fundamental assessment of the soybean futures market. Brady added, “It’s natural for soybean prices itself to rise with the demand of the actual by-product.”
Soybean futures have rolled over to a technical uptrend only last week with lack of follow-through. We can expect more range-bound until July Soybean futures can break through resistance at $9.95, or support at $9.60 per bushel.
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.
Six-Month Lows on Planting Progress for Corn Futures
Corn futures extended their lows to prices not seen since October once the USDA released the latest planting progress statistics from last week. Corn futures are currently down just over .04 per bushel at $3.57 at the Chicago Board of Trade.
Evidently the planting progress showed farmers busy at a “rapid pace” in the Midwest with 55% of the domestic corn crop planted. Compare this to nearly 28% of corn planted this time last year, and the five-year average of 38% for this time of year.
Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, shared his fundamental analysis regarding the current corn futures situation by stating, “I know it sounds redundant, but farmers are ensuring they get their (corn) crops in while the weather id to their benefit.” Medina adds, “The weather has been rather ‘kooky’ this year east of the Continental Divide.”
The trend for corn futures remains down with no bottom yet in sight. I suspect corn futures will be due for some type of relief rally 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: Crude Oil & High-Grade Copper (Both new this week.)
DOWN Trending Futures Markets: Coffee, Natural Gas, Kansas Wheat, Corn & 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.
Grain Futures May Be Seeing Valuation Buying
Both corn futures and wheat futures may be experiencing buying demand from their recent lows at what may be considered bargain prices from the last six months. Both grain futures began the day extending their gains from the last couple of days, but have since turned lower to close down for the day at the Chicago Board of Trade.
Corn futures fell to nearly $3.62 per bushel Tuesday which is its lowest level since early March and is down about 2% this month. Wheat futures saw a contract low of $4.6375 on Tuesday with favorable forecasts in the key wheat growing regions, and this market is on track to have dropped 5% this month.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his fundamental analysis regarding the current grain futures situation by stating, “With plenty of inventory, favorable weather, and planting well ahead of being on track, we can expect more downside action.” Craney adds, “I just can’t imagine a scenario to make these two grain markets bullish anytime soon…”
Corn futures and wheat futures are clearly down with no bottom yet in sight. Looking for a retracement higher in these grain markets before getting on-board the short side.
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.
New Highs For Crude Oil After Weekly US Supply Data
Crude Oil futures are up $2.12 per barrel today to highs not seen since December after inventory data revealed domestic oil supplies rose to levels less than expected last week. Crude oil futures are currently trading just above $59 a barrel at the New York Mercantile Exchange.
According to the US Energy Information Administration, crude oil inventories increased by 1.9M barrels in the week ending April 24th, falling short of the expectations for an increase of 2.3M barrels. As it stands now, domestic oil inventories total nearly 491M barrels which is the most in 80 years – even drilling activity waning!
Kevin Riordan, director of research at Capital Trading Group in Chicago, shared his fundamental analysis regarding the current crude oil futures situation by stating, “The current rally in crude oil (futures) has the look and feel of a relief rally after falling too fast and too low.” Riordan adds, “Eventually the fundamental situation of supply and demand will catch-up with the markets.”
The trend for crude oil is up and with new highs breaking out today there is no top yet in sight. We’re seeing the repercussions of higher oil prices at the pump – already a dollar higher per gallon from the 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.
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