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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:
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
DOWN Trending Futures Markets: Soy Oil, Coffee, Cotton & Feeder Cattle
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.
US Data & Need for Fed Clarification Send Gold Futures Soaring
Gold futures have blasted-off today reportedly once mixed domestic data highlighted uncertainty with the Federal Reserves timing of their next rate hike. Gold futures are up $22.40 per ounce currently trading at $1,153.90 at the New York Commodity Exchange.
The US Commerce and Labor Departments both released information such as initial jobless claims, durable goods orders (and “core” durable goods orders), orders & shipments for core capital goods, which came in outside analysts projections, but also revisions from previous reports were eye-openers for the gold trade. Later today, the Federal Reserves Chairwoman will be delivering a speech that investors will be listening to that may provide clarity on last week’s decision to keep interest-rates steady.
“Much information released today which the gold (futures) trade is projecting as inflationary,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, sharing his assessment regarding the fundamental situation of the gold futures markets. Craney adds, “Couple the possibility of inflation with the fed’s leaving interest-rates unchecked and boom, there goes gold (futures).”
The trend for gold has been back and forth with big swings in the past month, and is now at a crossroad to switch back up. Gold futures will require a little more action to the upside to change the direction to up in my work, however.
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 at Risk with the Drop of Brazilian Real
Soybean futures have been put on notice coming into the northern hemisphere harvest, but in the southern, the currency crisis in Brazil has been a boon to soybean farmers there looking to unload their crop. Soybean futures, down four out of the last five trading sessions, is holding steady (up just over a penny) currently near $8.62 per bushel at the Chicago Board of Trade.
The Brazilian Real has fallen to a record low compared to the US Dollar, but the fall of the currency is setting-up favorable conditions for farmer’s there to see record high soybean sowings, despite early dry weather conditions. This Brazilian currency crisis, which provides great support for those farmers, may be an Achilles heel to farmers elsewhere with soybeans plentiful in supplies and stocks.
“Soybeans are reportedly selling for nearly $20.50 per sack at Brazil’s port of Paranagua which is up 33% for the year – good for the economy there,” said Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, sharing his assessment regarding the fundamental situation of the soybean futures markets. Plotkin adds, “Here in Chicago, however, soybean (futures) are down just over 14% in this same period. We may be chasing the Brazilian soybean market here…”
Soybean futures’ trend is down with no bottom yet in sight, however, the market is approaching long-term support that goes back to late 2012/early 2013. With harvest period in sight, I expect soybean futures to remain choppy to down at best until clearer fundamental conditions are learned after harvest.
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.
Feedlot Data Halts Cattle Futures Decline
Cattle futures have put on the brakes on a market near its 15-month lows as data is emerging showing the number of animals going to feedlots has spiraled to an all-time low. Cattle futures traded down $1.50 per CWT to settle near $138.25 at the Chicago Mercantile Exchange.
Cattle used for meat raising usually get placed at feedlots to fatten-up before going to market, but the number of animals scheduled for feedlot placement fell almost 5.5% from the same time last year – the fewest since the USDA started record keeping in 1996. The feedlot population is reportedly just shy of 10M-head of cattle, which is actually more than 90K-head short of analysts expectations but still considered rather bullish for this market.
“The fewer number of cattle allotted for feeder operations traditionally signals tighter supplies ahead,” said Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, sharing his assessment regarding the fundamental situation of the cattle futures markets. Evans adds, “Although cattle futures are near year-and-a-half lows, the volatile price action down here may be signaling this year’s forthcoming bottom.”
The trend for cattle futures is down with no bottom yet in sight. Cattle futures will have to demonstrate a halt of lower prices before a change in trend occurs, but let’s enjoy the low prices while we can.
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 and Lean Hogs (New this week.)
DOWN Trending Futures Markets: Soy Oil, S&P 500 Index, Crude Oil, Coffee and Cotton & Feeder 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.
Cocoa Futures Making Run to Multi-Year Highs as Butter Trade Expands
Cocoa futures are rallying to multi-year highs with the pick-up in demand from cocoa exporting nations in SE Asia as well as Europe. Cocoa futures are up 12 points today currently trading at $3,279 per ton at the Intercontinental Exchange.
Malaysia has emerged as a major cocoa butter exporter since 2007 and last year exported 103 tons of product – 65% more than the year prior accounting for 20% of total US cocoa butter imports. The European countries of Estonia, Germany, and the Netherlands were also main global suppliers of cocoa butter last year.
“Cocoa butter is a product that will never be out of demand as long as it can reach most of the world’s markets and the people, then the constant demand can keep cocoa (futures) prices elevated,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, sharing her assessment regarding the fundamental situation of the cocoa futures markets. Levy adds, “With countries getting these current (cocoa futures) prices, the incentive to keep the market flooded with product will remain high.”
Cocoa futures trend is up with a recent resumption of the up-trend only this month. Key resistance for cocoa futures is at 3400 which is well within reach…
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.
Bearish Demand Keeps Natural Gas Near Multi-Year Lows
Natural gas futures has made an about-face in the past two days back down near the $2.65 support level as the bearish demand outlook still appears bleak. Natural gas futures are down .065 cents (per btu – “British thermal unit”) today currently trading at $2.663 at the New York Mercantile Exchange.
Weather has been playing the biggest part of price discovery it seems, but shifting weather forecasts have kept natural gas futures from breaking out of their tight range most of this year. Natural gas futures six-month high’s are near $3.15 and six-month low’s resting at $2.60 per btu – a .45 cent range.
“With summer heat behind us, and inventories stacking up, it will take much to get this market (natural gas futures) moving higher.” said Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, regarding the fundamental assessment of the natural gas futures markets, Brady adds, “Even tomorrow’s energy administration storage report is expected to show an additional 80B cubic feet build-up in storage, so let’s see if there are any surprises.”
The trend for natural gas futures is down but with a very long and extended “bottom” coming into view. It will take prolonged upside action for an all out trend change to the upside, so for now let’s just enjoy this ultra-low consumer price.
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.
Milk Futures May See Another Wave Higher Thanks to El Nino
Milk futures, although $2.50 lower from its August highs and $2.00 less than its June highs, may be setting up for another run to those higher prices if El Nino threats to disrupt weather patterns for New Zealand dairy farmers come true. Class III milk futures are trading up .04 cents (per CWT) currently at $15.79 (CWT) today at the Chicago Mercantile Exchange.
The Australian official news bureau reportedly rated this forthcoming storm to be the strongest since 1997-98 and stated its not going to go away any time soon, but will be felt into the new year. This comes at a time when New Zealand has reportedly reduced the numbers of their dairy cows, culling “poor performing” cows and heifers.
“New Zealand has emerged as a major milk producing nation and currently dairy farmers there are keeping a close watch on the developments of this (phenomenon),” said Laura Taylor, a senior market strategist at RJO Futures in Chicago, regarding the fundamental assessment of the milk futures markets, Taylor adds, “We may see milk futures strengthen simultaneously with El Nino.”
Milk futures trend is currently down with no bottom yet in sight. It will take time and certain price action to change milk futures trend so let’s all enjoy the lower prices at the store while we can.
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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