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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:
Commodity Prices Crashing to 13-Year Lows
The bench-mark “Bloomberg Commodity Index” has been in freefall for the fifth-day in a row now, which is reportedly the biggest stretch of declines since March. Yesterday the commodity index dropped a reported 1.1% alone with the help of a strengthening dollar and the perceived agreement for higher interest-rates forthcoming..
Gold only yesterday spiraled lower to five-year lows, but not just that market – Brent crude oil, industrial metals, natural gas, and even some agricultural products have been part of this rout in commodity prices. A strong dollar means higher costs for importers commodities, while higher interest-rates make borrowing costs unattractive for anybody.
“With the Federal Reserve Chairwoman clearly signaling a hike in interest-rates soon, rather than later, it’s economics 101 for investors to sell assets and hold onto whatever gains or cash they have on hand,” said Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, regarding the fundamental assessment of the commodity futures markets. Evans added, “The strength of the US Dollar makes lower raw materials costs a slam dunk.”
More than one-half of the markets I trade (all agricultural markets) are in down-trends, or have recently rolled over into down-trends. The few that are still “up” are all at a crossroads, so, time for traders to accept lower commodity futures prices ahead.
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, Corn, Soybeans and CBT Wheat
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.
Gold Futures Lagging on Greek Debt Restructuring & US Data
Gold futures are down for the fourth straight trading session after mixed-signals with the US economy and the unfolding of the Greek debt crisis. Gold futures are down $2.70 per ounce currently at $1,144.70 at the Commodity Exchange in New York.
Gold – usually viewed as a “safe-haven” for investors amid inflation and world instability – has been lagging despite the sluggish economy in China, the Greek debt crisis becoming larger, and the recent deal on Iran’s nuclear ambition. Here in the US the Federal Reserve Chairwoman, Janet Yellen, is said to be sending indications that current domestic conditions may likely justify hiking-up interest-rates, however the stronger dollar, recent initial jobless claims, and even manufacturing data are all unclear.
“You would think the world instability in and of itself would be enough for gold (futures) to be trending higher,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, regarding the fundamental assessment of the gold futures markets. Levy added, “With gold at its year-to-date bottom, it may take a lot more ‘surprising’ news to change its direction.”
The trend for gold futures is down with no bottom yet in sight. A bounce higher in gold futures is becoming overdue in my opinion.
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.
Storage Report May Provide Direction for Natural Gas Futures
Natural gas futures appear to be sitting still near the high end of their trading range of nearly two months as energy traders patiently await new data on gas inventories to help determine the demand for the fuel. Natural gas futures are up more than .07 cents today currently trading just over $2.91 per BTU at the New York Mercantile Exchange.
The US Energy Information Administration’s storage report is due for release tomorrow with an expected increase of 95B cubic feet for the week ending July 3rd (an increase of 91B happened the week before). The total domestic storage at this time is reportedly 32.8% higher than this same week last year and 1.7% above the five-year average for this period in the year.
“The expected news for the natural gas (futures) trade is certainly not bullish,” said Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, regarding the fundamental assessment of the natural gas futures markets. Brady added, “Only a ‘surprise’ in natural gas news can probably create a breakout from this six-month sideways period.”
Natural gas is said to be the US’s top fuel used for everyday home use. With natural gas prices this low, its a real plus for the domestic consumer.
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 Post USDA Report Re-cap
Grain futures realized an initial boost in prices after Friday’s USDA crop production report, but have since cooled-off and returned to report day prices, and in the case of wheat futures, Kansas Wheat has since retreated even lower. All grain futures are down for the day between .02 to .09 cents for the day at the Chicago Board of Trade..
The USDA revised domestic corn inventories significantly lower for the 2014-15 season – almost 100M bushels lower. US soybean stocks revised down 75M bushels, and wheat reserves at the end of the 2015-16 season revised upward by 28M bushels.
“It looks like we’re seeing the grain futures markets reflecting these revisions with current activity,” said Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, regarding the fundamental assessment of the grain futures markets. Medina added, “All grain markets may appear in strong uptrends now, but as we go into corn and soybean harvest the picture can be much different.”
As mentioned above, the grain markets are all in uptrends that emerged and accelerated without any significant pull-back – all based on a weather related outlook. From what I understand the weather is changing with milder temperatures and the Midwest is getting all the rain the crops need to flourish. Maybe its time to reassess the grain market’s uptrend so late in the season…
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 Kansas Wheat, Corn, Soybeans & CBT Wheat (These four new this week.)
DOWN Trending Futures Markets: Silver and Gold, Copper & 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.
China’s Stock Meltdown Spilling Over to Commodity Markets
Commodity futures markets are the latest to take the hits in China as they are simultaneously dealing with a stock market meltdown. The Chinese government is taking measures to ease the falling Shanghai Composite Index, but investors insist on taking as much cash out of the Chinese markets.
A Chinese trader at a private equity firm reportedly told a Bloomberg reporter “people are selling everything in sight to raise cash…some need to cover margin calls in the stock market, and others fear the Chinese economy will be damaged by the crisis.” Most commodities tumbled today, be it silver to sugar…metals (including nickel and silver) on the Shanghai Futures Exchange were down their daily limit…rubber entered a bear market…steel (rebar) and iron ore…eggs…soymeal – all dropped limit down.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shares his view regarding the fundamental assessment of the commodity futures markets by stating, “It seems that commodity markets in China are besieged as collateral damage from their stock market.” Craney added, “Just goes to show you how all markets can be affected when one sector gets hit hard – investors look for other sources for cash now.”
While circumstances in China appear bleak at this time, the US markets are not showing the signs of the sell-off our Asian counter-parts are experiencing. In fact, the US commodity markets, in general, only have slightly higher volatility than normal but appear to be trending normally.
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 Pullback for Fifth Session on Improving Crop Prospects
Soybean futures have sold-off everyday since the June 30th spike in price reportedly due to an upbeat crop outlook in the Midwest. Soybean futures extended their lows today to just under $9.79 per bushel at the Chicago Board of Trade – soybean prices not seen since late June.
The USDA surprised analysts by reportedly stating almost 63% of the domestic soybean crop was rated in good to excellent condition as of last Sunday. Compare this to soybean emergence reported at 93% complete which is an improvement from 89% the week earlier, and 21% of the soybean crop blooming which is up from 13% in the prior week.
Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, shares his view regarding the fundamental assessment of the soybean futures markets by stating, “The entire gain from the June 30th USDA crop planting and acreage report has been erased as of today.” Plotkin added, “This may mean the concern soybean traders had at that particular time may not be a concern today – weather markets are constantly evolving.”
The trend for soybean futures is up with no top yet in sight. Despite the sell-off from the late June high, this appears to be an opportunity for those bullish this market to find a position 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.
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