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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:
After Reaching Two Month Highs, Corn Futures in Retreat
Corn futures extended its gains early in the trading session to trade at highs not seen since last month, but has since abruptly turned around to trade lower for the day. Corn futures are currently $3.91 per bushel, down .04 cents at the Chicago Board of Trade.
Corn futures have gained 5% since last Wednesday’s low reportedly from technical buying once futures broke above key moving averages after the USDA Crop Progress report. A US Dollar declining from it’s highs has also played a role in stronger corn, I suspect.
Kevin Riordan, director of research at Capital Trading Group in Chicago, shared his fundamental view regarding the current corn futures situation by stating, “We know the supply is abundant, but we don’t know what the dollar wants to do.” Riordan adds, “With corn being the country’s biggest cash-crop, importers will still hold out until a clearer picture with the currency situation unfolds.”
The trend in corn futures has technically turned “up” with today’s very brief spike higher. With the complete and immediate turn-around with corn futures following that high, I will view it as a false signal until today’s high is to be taken out.
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 Rising Takes Ground Beef to Record Highs Last Month
Cattle futures have climbed back higher and apparently had taken ground beef prices with it to all-time record highs. The average price of ground beef almost hit $4.24 per pound, while feeder cattle futures have come within .10 cents of their all-time highs earlier this week at the Chicago Mercantile Exchange.
In August of last year the average price of ground beef topped $4 a pound for the first time, however, the Bureau of Labor Statistics (“BLS”) released revised data yesterday reporting the new record high for ground beef to be $4.238 per pound in February.
Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, shared his fundamental view regarding the current cattle futures situation by stating, “We’re still seeing the repercussions of culling the domestic cattle herd in 2013.” Plotkin adds, “Cattle producers are adding to their production, but supply is obviously outpacing demand.”
Cattle futures trend is up with no top yet in sight. I am looking to reset a long position that was offset just before Friday afternoon’s “cattle on feed” report with cattle futures now pulling back.
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 Crop Conditions Improving, Wheat Futures Lower
Wheat futures have retreated from five-week highs after the USDA reported all domestic winter-wheat crop conditions improving last week. Wheat futures are down more than .10 cents per bushel today (as of this writing) and down as much as .15 cents from their highs yesterday at the Chicago Board of Trade.
The USDA revealed Oklahoma winter-wheat rated 44% good to excellent and Texas winter-wheat at 55% – both improving by 4% from the previous week. In Kansas (the country’s top producing wheat state), only 41% of the wheat crop was rated good excellent which is unchanged from the previous week.
Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, shared his fundamental view regarding the current wheat futures situation by stating, “The winter wheat conditions may have improved overall, but is that amount enough…?” Evans adds, “Wheat futures, after-all, are in a new up-trend at normally the wrong time of the year.”
The trend for wheat futures has emerged up (surprisingly) only last week. The seasonal tendency is for wheat futures to be trending in the opposite direction (“down”) from February through July, so I am a bit skeptical about what has unfolding, but will trade accordingly.
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 that we have identified, serve to forewarn us of the next possible bigger move.
Here are the commodity markets which illustrate the bigger picture changing for them:
UP Trending Futures Markets: (None at this time.)
DOWN Trending Futures Markets: Crude Oil, Gold, Lean Hogs, Coffee, S&P 500 Index, Euro-FX, Corn and British Pound, Sugar, Soymeal & 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.
Grain Futures Par Gains in Alignment with US Dollar
All major grain futures did an “about-face” after a strong opening at the beginning of the trading session just after the US Dollar initially gapped-lower. All grain markets are down between .05-.10 cents per bushel (as of this writing) after being up as much as .05-.15 cents at the Chicago Board of Trade.
The US Dollar is said to be the culprit of this grain complex volatility this week as the dollar index tanked to three-week lows on Wednesday alone, and then rebounded and being “up” again today. The US dollar is somewhat of the bottom-line when it comes to American goods and products – the stronger the dollar, the less purchasing power an importer has to buy US grains.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her fundamental view regarding the current grain futures situation by stating, “It was clear to see traders gauging the activity of the US dollar with grain prices on today’s open.” Levy adds, “Gap-higher openings like we saw on the open don’t generally occur without the influence by the USDA.”
All grain futures trends are down with corn and wheat futures leading the pack. I would expect the volatility of both the dollar and grain markets to subside now that the Federal Reserves monetary-policy meeting is behind us.
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.
Record Domestic Inventories Send Crude Oil Futures to $44 Per Barrel
Crude oil futures briefly reached the $44 per barrel benchmark in very early trading based on the outlook of oversupply concerns as energy industry data revealed crude oil inventories had reached a new record high. Crude oil futures finished the day $2.43 per barrel higher at the New York Mercantile Exchange.
The American Petroleum Institute (“API”) reported US crude oil inventories rising by 10.5M barrels to 450M barrels in the week ending March 13th. A high-profile media poll had initially indicated analysts expecting only a 3.8M build-up of inventory, so you can realize the significant difference.
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, shared his fundamental view regarding the current crude oil futures situation, “When you take into consideration the crude oil inventory increases we’ve seen already, adding nearly triple what is expected is a shock to the traders and the market.” Brady adds, “After all, crude oil (futures) finds it’s way with with what is expected and what is actually reported…”
Crude oil’s trend is clearly down with no bottom yet in sight – especially hitting new contract lows just today. Crude oil futures is not a market I trade, but I report about it because it correlates with the price of gasoline – a product we are so dependent upon.
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 Lower After Housing Starts, Ahead of FOMC Meeting
Gold futures have retreated back to lows not seen since November reportedly on mixed housing data and ahead of the Federal Reserve’s two-day monetary policy meeting. Gold futures are currently trading at $1,148 per ounce at the COMEX division of New York’s Mercantile Exchange.
The US Department of Commerce reported the number of housing starts issued throughout the country fell dramatically last month, while at the same time housing permits exceeded expectations (thus, the mixed picture). The other side of the bearish gold coin is that traders are looking ahead to tomorrow’s official statement by the Federal Reserve to see if there is any indication by them to begin raising interest-rates as early as June.
Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, sharing his fundamental analysis regarding the current gold futures situation saying, “It’s expected for traders (investors) to be hesitant in establishing long positions ahead of tomorrow’s fed-statement.” Medina adds, “All eyes and ears are on tomorrow’s meeting announcement.”
The trend for gold futures is down with no bottom yet in sight. This has been a difficult market for me these last two weeks when gold futures accelerated with the trend and through what would have been my sell stops – and never looked back.
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: None at this time.
DOWN Trending Futures Markets: Natural Gas, Lean Hogs, Coffee, Crude Oil, Copper and Gold, S&P 500 Index, Euro-FX & Corn (These last 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.
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