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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:
India Set to Become World’s Top Cotton Producer: Cotton Futures
Cotton futures is having to negotiate a top cotton producer with India – a country surpassing the US and China as they are reporting double-digit acreage reductions for the 2015/16 season. Cotton futures are down 36 points today settling at .6364 cents per pound at the Intercontinental Exchange in New York.
Combined, the USDA says both China and India produce more than one-half of the world’s cotton, but now India’s “cotton climb” since it surpassed the US in cotton production in 2006 is expected to bring forth 26.5% of world supply. China has been the worlds top cotton producer since 1982, with Brazil and Pakistan rounding out the top five.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, had this to say regarding the fundamental assessment of the cotton futures markets, “The ‘landscape’ is changing in the agri-business world with the use of biotechnology and we’re seeing this with cotton too.” Levy adds, “Farmers are proving to make the best of new technology and it appears the Indian farmers are running with it.”
Cotton futures trend is technically down, but more choppy for more than the past four months. I would expect some type of rally in cotton futures soon where short-selling will be least risky.
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: Soymeal and 10yr. T-Notes (New this week.)
DOWN Trending Futures Markets: Gold, Copper and Corn, Soy Oil & Coffee (These three 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.
Corn Futures Rise, Then Fall, .75 Cents After Wettest Season in 30 Years
Corn futures, in a one month period, have rallied and retreated .75 cents over precipitation concerns in the corn belt region of the Midwest. Corn futures are up .04 cents going into Thursday’s close currently trading just above $3.82 per bushel at the Chicago Board of Trade.
The rains in the state of Illinois alone are prompting state officials there to possibly request federal disaster assistance after receiving the most rain from May to present in the last 30 years! While Illinois is reported to have over 22 inches of rain between May & June, the water-logged fields might not reduce corn yields as much as it appears – according to an expert Midwestern analyst.
“In past years of similar heavy rains when things looked bleak for the corn harvest, the yields surprised the experts and this year is shaping up with similar statistics,” said Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, regarding the fundamental assessment of the corn futures markets. Brady added, “It will take more time to get a clear picture and this suggests more volatility for corn (futures) this summer.”
The trend for corn futures is down and this particular market has sold off from its mid-July high near $4.55 per bushel with absolutely no retracement from July 14th. Corn futures is a market that the novice trader should stay away from, and for the professional it should require a contraction of volatility before taking any position.
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.
Summer Slump for Cattle Futures May be Temporary
Cattle futures are said to be following their typical spring high to summer low trading pattern – albeit at much higher beef prices than just a few years ago – but there are signs prices can resume higher once the summer slump has passed. Feeder cattle futures are up today $0.575 cents per pound currently trading at $211.82 (CWT) at the Chicago Mercantile Exchange.
Feeder cattle prices from early April (to present) have fallen almost $22 per pound – a 13% drop in price – but in the five year period from 2010 to 2014 feeder cattle prices have averaged not quite a 10% drop in the same time period. Industry experts claim feeders may continue to drop until mid-August, but find some type of support thereafter.
“Cattle (futures) prices are still high and the bigger than usual drop in price may reflect beef prices coming back to normal,” said Laura Taylor, a senior market strategist at RJO Futures in Chicago, regarding the fundamental assessment of the cattle futures markets. Taylor added, “When beef prices are high the average consumer finds alternative meals to afford, or feed their family’s. This cattle situation is no different.”
Feeder cattle futures trend is down with no bottom yet in sight. In my study I find there is support coming in at $206.00 (CWT) which tells me feeder cattle futures can still slip lower from this current 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.
Hog Futures Making Slow Comeback as Record Production Maybe Spurring Demand
Hog futures have halted their first-quarter slide and appear to be making their way higher as record production of hogs is reportedly putting more pork on the menu. Hog futures are up over $1.52 per CWT and are currently trading at $65.07 (CWT) at the Chicago Mercantile Exchange.
Wholesale prices of pork are down 40% since last summer and more restaurants are reportedly buying more of the product to serve and apparently this is creating demand. With prices so low compared to beef, domestic pork production is heading for an all-time high this year.
“With all the extra pork supplies out there, restaurants of all types are seeing the value and creating more items to serve to the public,” said Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, regarding the fundamental assessment of the hog futures markets. Medina added, “The hog trade appears to have picked-up on the demand and stopped the early year onslaught.”
The trend for hog futures appears to be in a very early stage of an up-trend. Prices are still low enough for pork lovers to enjoy their favorite sandwiches or dishes, but a breakout above $72.00 (CWT) could mean steadily higher prices down the road.
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: Soymeal and Soybeans
DOWN Trending Futures Markets: Silver, Gold and 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.
Slowing Demand for Supply Weighing on Copper Futures
Copper futures are said to be spiraling lower not only because demand has been hampered for the raw material, but now there’s confirmation of that by the lack of requests to withdraw copper from the London Metal Exchange warehouses – the lowest since March, 2013. Copper futures is down $4.50 per pound today (as of this writing), currently trading at $2.38 at New York’s Mercantile Exchange.
Copper is used in many things in our daily life, such as car’s, electronic devices and power lines, but stockpiles of the industrial metal have reportedly doubled over the last two years as consumption has all but dried-up. China, the world’s biggest copper consumer, is experiencing slower economic growth hampering demand for the metal, but they are just one country of many.
“There is simply too much physical copper available with a fundamental view,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, regarding the fundamental assessment of the copper futures markets. Craney added, “Being that copper is considered an ‘industrial metal,’ it may take not only China’s economy, but other nation’s economy to turn the copper market around.”
Copper futures trend is clearly down with no bottom in sight. A bounce higher should be required before traders even consider taking a short position because the risk (volatility) is quite high.
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 Back Below $50 on Supply
Crude oil futures traded below $50 per barrel today for the first time since the initial down-move In March took oil prices to the $44 dollar area. Crude oil futures are trading down $1.69 as of this writing currently at $49.14 per barrel at the New York Mercantile Exchange.
The analysts reportedly were expecting a drop in supply of nearly TWO MILLION barrels, but the API reported a rise of 2.3M barrels here in the US as of last week – a significant spread. Another report from the Energy Information Administration may show a slightly less amount of crude oil stockpiles as of July 17th.
“For a very brief amount of time it appears peak summer demand was reflected in the API & EIA estimates,” said Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, regarding the fundamental assessment of the crude oil futures markets. Plotkin added, “With the yearly summer demand picture behind us, the crude oil market could very easily make new year to date lows.”
The technical trend for crude oil is down with no bottom yet in sight. With crude oil below $50 per barrel, maybe us consumers can see gasoline prices reflected lower as well…
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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