The Official Brian Schad Commodity Futures
& Options Trading Corporation Website
Commitment to Trading Excellence
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:
Chinese GDP Speculation Adds to Copper Futures Choppiness
Copper futures is once again in choppy trading with disappointing Chinese growth data prevailing the speculation that Beijing officials will have to do more to jumpstart their economy. Copper futures ended trading Wednesday at New York’s Commodity Exchange up almost .02c from the day before near $2.72 a pound.
The Chinese economy is said to have grown by 7% in the first quarter – which was forecasted – but down from an expansion rate of 7.3% from the prior quarter. This happens to be the slowest pace of growth for their country since the global financial crisis era in 2008.
“Copper traders need to see Chinese policy-makers doing more to elevate their flailing economy, and it needs to happen soon,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, sharing his fundamental analysis regarding the current copper futures situation. Craney added, “The overall economy may be growing – albeit slower – but their industrial production slowing down below expectations may be the tell-tail signs of what to expect.”
The trend for copper futures are at a crossroad. The up-moves in copper fail to have immediate follow through thrust which keep me on the sidelines.
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 Futures Extend Lows on Domestic Rainfall
Wheat futures extended its lows (after yesterday’s spiral) to prices not seen in four weeks after rain had been forecasted in key wheat growing states. Wheat futures ended the trading session near $4.95 per bushel at the Chicago Board of Trade.
Traders had been monitoring the precipitation models closely for this news and yesterday’s .24c plunge began the confirmation of this development. Also yesterday, the USDA confirmed the domestic winter wheat crop being rated at 42% “good to excellent” as of April 12th – down from 44% the week earlier, but much better than the “34%” rating this time last year.
“The unknown rainfall factor for wheat traders is revealing itself,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, sharing his fundamental analysis regarding the current wheat futures situation. Riordan added, “The wheat (futures) market had been on (what seemed) stand-by mode for a few weeks, but the seasonal tendency appears to be playing out.”
Wheat futures trend is at a crossroad – still technically up, but if the market takes out today’s low before trading up to the $5.18 level, that would create the means to be bearish. Wheat futures had been trading sideways for almost three months, but now a clearer picture should be unfolding.
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: Russell 2000 Index & Cotton (New this week.)
DOWN Trending Futures Markets: Lean Hogs, Coffee, Euro-FX, Sugar, Soymeal, Natural Gas
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.
Final Look at 2014/15 Crop by USDA a Mixed-Bag for Grain Futures
Grain futures were anticipating the USDA’s final look at the 2014/15 crop, but the actual data was mixed. Grain futures ended lower across the board with soybeans down nearly .17c, wheat down .075, and corn down a penny per bushel at the Chicago Board of Trade.
The final ending stocks saw an increase for corn by 50M bushels, a 15M decrease for soybeans, and a seven-million bushel decrease for wheat. The world production saw only a negligible increase in production for all three.
“Today’s grain market report was really no surprise, but rather a reflection of the numbers released last week,” said Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, sharing his fundamental analysis regarding the current grain futures situation. Plotkin added, “Now that the 2014/15 crop season numbers are in, farmers can now evaluate how to continue for the forthcoming crop season.”
The soy-product futures are still in down-trends, but corn and wheat are still holding on to fragile technical up-trends (in my work). Prices going forward from here should be more in line with weather fluctuations rather than supply since supply from old crop is now a definite known variable.
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.
Cattle Futures Strengthening but Seasonal Tendency Coming Into Play
Cattle futures are coming off of fresh strength from last month and cattle feedlot managers may be able to squeeze out a few more bucks from the packers because of it. Feeder cattle futures are however, down today about 90 points and are trading at nearly $2.14 per pound at the Chicago Mercantile Exchange.
Cattle futures peaked late last year at the $2.32 level but have been making a run back to these highs since basing in February at the $1.90 support level. Cattle producers are looking to make the most they can before the cattle marketing season begins to seasonally increase.
“Even though feeders have been strong this past month, it doesn’t mean the average cattle rancher is reaping the full potential profit,” said Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, sharing his fundamental analysis regarding the current cattle futures situation. Evans added, “Cattle coming off feed recently and animals being harvested in the next few weeks are feeders that were purchased at record prices, so on a cash-to-cash basis the rancher needs prices to remain high to realize a respectable profit.”
Cattle futures trend is up (we trade “feeder” cattle” – animals preparing for feedlot use. The cattle futures market is still strong, but as mentioned above the seasonal tendency for beef prices is to decline into the mid-June time frame is fast approaching.
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.
With Only 2% Planted, Cotton Futures Soar
Cotton futures have blasted-off these past three trading sessions on the outlook of cotton planting being behind schedule. Cotton futures are up 125 points to .6659 (a pound) at this time of writing on the InterContinental Exchange – its highest prices since September.
Of the 15 cotton producing states from last year, only “three” are reporting any planting representing 2% of cotton planted as of yet when the five-year average at this time should be 6%. California’s planting lag is the most significant with only 10% planted for the state when 28% was planted this time last year, but then again Texas is only at “1%” planted when 9% was in last April. It’s safe to say the water limitations may be to blame in both those state’s case.
“Where water flows, crops grow,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, sharing her fundamental analysis regarding the current cotton futures situation. Levy added, “If water can’t be dedicated to the crop, then cotton futures may be only in the beginning stages of its uptrend.”
The trend for cotton futures is up as of today. I will be looking for some type of pull-back in cotton futures to get on-board this market.
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: Russell 2000 Index (New this week.)
DOWN Trending Futures Markets: Lean Hogs, Coffee, Crude Oil, Euro-FX, Sugar, Soymeal, Japanese Yen, Soy Oil & Natural Gas (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.
Natural Gas Futures Finding Support with Less Supply in Storage
Natural gas futures found support during trading Thursday when data showed domestic natural gas supplies falling more than expected last week. Natural gas futures for May delivery ended the day at $2.69 per BTU, up 94 points at the New York Mercantile Exchange.
In the week ending March 27th, the US Energy Information Administration reported natural gas in domestic storage declined by 18B cubic feet – when only a decline of 10B was “expected.” In the week prior it was reported a 12B cubic foot rise, and a year earlier at this time supplies fell by 71B cubic feet.
“Supplies compounded with a milder winter may keep natural gas prices depressed until later this year,” said Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, sharing his fundamental analysis regarding the current natural gas futures situation. Brady added, “This time of year usually sees the weakest demand for natural gas and I can’t imagine any scenario in the near-term to change the fundamental picture.”
Natural gas futures trend is down with no clear bottom yet in sight. This report is not necessarily for natural gas futures traders, but users of the product in our everyday lives – great news here for the 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.
Recent Comments