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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: N/A
DOWN Trending Futures Markets: Gold, High-Grade Copper, Soy Oil, Natural Gas, Sugar, Russell 2000 Index and Crude Oil, Cotton, Silver & Japanese Yen (These four 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 Market to Evaluate South American Crops Hit by El Nino
Wheat futures will have to assess the damage done to South American crops affected by the reportedly worst El Nino to strike the continent in 30 years. Wheat futures ended the day up .11 cents to close just above $5.03 per bushel at the Chicago Board of Trade.
This week has seen flooding and landslides in both Argentina and Chile that is said to have damaged crops as well as 30 towns affecting 20,000 people. It is reported that not only 3.5M hectares of wheat crops were hit in Argentina, but the heavy rains will also bring on fungal disease which will adversely affect the wheat’s quality.
Laura Taylor, a senior market strategist at RJO Futures in Chicago, had this to say regarding the fundamental assessment of the wheat futures markets, “The wheat (futures) market was just hit hard with yesterday’s report, but this news concerning South American wheat cannot be overlooked.” Taylor adds, “Hopefully our domestic wheat market will be enough to feed those affected there.”
The trend for wheat futures is down with no bottom yet in sight. Hopefully yesterday’s downward action was a “capitulation” phase for wheat futures.
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.
USDA Report a Shocker, Sends Corn Futures & Soybean Futures Limit Down
Corn futures and soybean futures initially went limit down following today’s USDA Crop Production report which increased corn and soybean yield estimates significantly. Corn futures ended the trading day down .195 cents at $3.68 per bushel and soybean futures down .615 cents to end the trading session at $9.10 per bushel at the Chicago Board of Trade.
Today’s report is the first survey-based yields for corn and soybeans which obviously came in much greater than analysts had predicted. For corn, the yield is estimated at 168.8 bushels per acre – much higher than the anticipated average of 164.5; and soybeans now have a current yield estimate of 46.9 bushels per acre when experts were expecting an average 44.7 bushels per acre.
Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, had this to say regarding the fundamental assessment of the corn futures & soybean futures markets, “Not a darn thing bullish in today’s USDA report.” Medina adds, “We expected good yields with the favorable weather the Midwest has been experiencing, but nothing like today’s numbers.”
Corn futures and soybean futures trends are down with no bottom yet in sight. I expect these markets to fall further over the next two months as we get closer to the harvest period.
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: Bacon Demand Making Pork Belly Prices Soar
Hog futures may not reflect it now, but spot pork belly prices have been on a tear since May due to the many creative uses of bacon in restaurants which is helping demand, but also depleting supplies. Hog futures are down .65 cents (CWT) today currently trading at $62.32 per pound at the Chicago Mercantile Exchange.
Late last week, the USDA reported a one-year wholesale price high for pork bellies – nearly $1.70 per pound – with much of this price surge due to a 174% spike since making a five-year low just this past April. Pork belly prices continued to make new lows despite the overall hog surge last year after a brutal virus required producers to cull a reported eight million (plus) piglets.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, had this to say regarding the fundamental assessment of the hog futures markets, “While pork prices were finding a low earlier this year, simultaneously beef prices were making a multi-year high in May creating demand for an alternative meat source.” Craney adds, “It seems as if though bacon is all over the menu’s around town recently with proprietors taking advantage of low pork belly prices.”
The technical trend for hog futures is at a crossroads – the trend is technically “up,” however lower-low prices tomorrow could turn the trend down. In the meantime, many of us can enjoy the benefits of relatively low pork prices while it lasts.
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: 10yr. T-Notes
DOWN Trending Futures Markets: Gold, High-Grade Copper, Corn, Soy Oil and Natural Gas, Sugar, Russell 2000 Index (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.
Agricultural Marketer Claims Now Is Not the Time to be Selling Wheat (Futures)
Wheat futures have rallied just over .20 cents from Monday’s monthly lows, but that’s peanuts compared to the unexpected $1.27 drop in wheat prices from the June 30th high. Wheat futures are up a nickel currently trading at $5.07 per bushel at the Chicago Board of Trade.
Despite last month’s sell-off, a Midwestern agricultural marketing strategist claims there are a couple of more rallies to come especially now that the cutting of the hard-red variety is mostly past at this time. As an advisor to domestic farmers nationwide he says to consider the seasonal standpoint and realize “making a lot of sales at harvest is rarely the right thing to do.”
Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, had this to say regarding the fundamental assessment of the wheat futures markets, “It’s not just here in the States where we have had weather problems creating volatility, but now there’s weather situations arising world-wide such as Australia, Brazil, and Russia – Brazil currently with the heavy rains.” Plotkin adds, “There should be more wheat (futures) volatility to come, but there should be more upside potential than downside looking forward.”
Wheat futures trend is down at this time and it is going to take more action to change that. I would expect wheat futures to continue this leg up through tomorrow, but at least one more test of the low before an up-trend were to emerge.
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 Seasonal Trend Can Change With Planting Schedule
Soybean futures usually follow corn in planting each season, but a Midwestern field agronomist is touting a change in this long held view in an effort to produce higher yields than customary. Soybean futures are up .11 cents today, currently trading just above $9.53 per bushel at the Chicago Board of Trade.
The challenges to planting soybeans earlier than normal include labor logistics and equipment modifications, however an expert says certain key factors in understanding better results for plant “canopy closure” will provide soybean farmers better yields. She says for this to happen there must be an “increase in soybean nodes and pods per plant” which brings us back to the need for farmers to better understand canopy closure in their fields.
Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, had this to say regarding the fundamental assessment of the soybean futures markets, “An earlier growing season has the potential to alter the seasonal tendencies that have been established for hundreds of years of soybean growing.” Evans adds, “Soybean harvests could begin sooner…a germination and emergence change can alter seasonal highs and lows between planting and harvesting.”
The trend for soybean futures is down and a relief rally appears to be emerging at this time. Soybean futures 18-day moving average is about .25 cents higher, so there may be higher prices near-term.
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.
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.
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