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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:
Annual National Meeting in China Has Copper Futures on Edge
Copper futures have been stalled lower for the last two trading sessions ahead of China’s “National People’s Congress” annual meeting to be held Thursday. Copper futures closed up slightly – at $2.6595 per pound in today’s trading at the New York Commodity Exchange.
Investors and traders of copper futures understand how important a meeting this with China being the world’s largest consumer of the industrial metal – accounting for almost 40% of the world’s consumption last year. Just yesterday copper futures plummeted with concerns over the outlook of China’s economy and the appeal of the industrial metal with a stronger US dollar.
“We’re looking forward to the official assessment of the Chinese economy by the officials themselves,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, sharing her fundamental analysis regarding the current copper futures situation. Levy added, “Most analysts predict a revised lower growth target with further stimulus measure forthcoming.”
The trend for copper futures is at a crossroads. The technical trend is up, however a breakout above Monday’s high’s will change everything in my view.
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 Hovering Above Contract Low
Natural gas futures have been testing its three week low as the time window for demand ticks away. Investors and traders alike are patiently monitoring near-term weather forecasts to gauge the strength of demand for natural gas.
Natural gas futures reached a low earlier today of $2.649 per million British thermal units at New York’s Mercantile Exchange – a price not seen since making contract lows nearly three weeks ago. Speculators on the bearish side have the outlook that warmer weather in most of the country will keep a lid on later-winter demand. Peak season for domestic natural gas use is between November through March.
“It’s not just the mild-weather in most of the country creating the bearish stance for natural gas futures, but also much supply that ‘wasn’t used-up’ because of the mild winter,” 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, “Energy producers forecasted wrong based on last year’s demand when supplies were 55% below the five-year average.”
Natural gas futures trend is down, but at a crossroads. A natural gas futures breakout above $3.05 could bring prices back to the $3.40 range, while a break below $2.59 with follow-through could send it to uncharted territory (in my study).
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 Trading 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: Cotton and S&P 500 Index
DOWN Trending Futures Markets: Natural Gas, Lean Hogs, Feeder Cattle, Coffee and Kansas Wheat
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 Remove All February Gains
Crude Oil futures erased all gains made this past month earlier today and was within $4 of last month’s multi-year low. April delivery crude oil futures settled today at $48.92 per barrel at the New York Mercantile Exchange from their lows of $47.80 earlier in Thursday’s trading session.
We were cautioned by analysts to brace ourselves for a bounce back up to the $70 per barrel range, but all three attempts to follow-through above $55 fell short. It is probably because all eyes might have been on yesterday’s “Energy Information Administration’s” weekly report stating US crude oil inventories increased by 8.4 million barrels last week – when only a 4M increase was expected.
“I understand a crude oil storage facility in Oklahoma reported storage at its highest capacity in over a year,” said Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, sharing his fundamental analysis regarding the current crude oil futures situation. Medina added, “Couple the glut of supply with a strong dollar and this month’s crude oil activity may be suggesting the overall move lower is far from over.”
The trend for crude oil futures is technically “down,” but at a crossroads. If crude oil futures were to break out above the $55 highs of this month, it’s first target should be $59, then $65 per barrel. However, a break below last month’s low could send crude oil futures to the low $30’s – if not lower.
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.
Strike by Brazil’s Truckers Affecting Soybean Futures
Soybean futures have back-tracked just as much as they shot-up in price yesterday based on what is transpiring a continent away. Soybean futures traded at the Chicago Board of Trade is currently down .115 cents at $10.0725 per bushel (as of this writing) after closing up above $10.18 only yesterday.
Apparently concerns regarding disruptions to supplies from Brazil had reportedly boosted prices as a strike from truckers there protesting high fuel prices has continued for a week. More recently the Brazilian government has imposed a fine on these truckers for blocking the road and holding-up grain exports at their nation’s second-largest exporting city.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his fundamental analysis insight regarding the current soybean futures situation by stating, “If Brazil wasn’t a major soybean exporter that competes with US supplies it wouldn’t be much of a story.” Craney added, “The demand for soybeans still exists so even when supplies ‘anywhere’ are threatened just goes to show how (grain) prices may spike.”
Soybean futures trend had turned up just last week, possibly due to this South American strike. Seasonally speaking, however, soybean futures do turn the corner right about this time so I’m happy to be with the new-found trend.
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: The Only Commodity to Fall More Than Oil
Despite energy and gold dominating the news wires recently, lean hog futures are the one commodity that has actually fallen MORE than crude oil. Lean hog futures are actually up 40 points at the Chicago Mercantile Exchange (as of this writing), but in the overall scheme of things the hog market has actually plummeted over 51% since the end of last June.
“Lean hog” (futures) – the market-term designating butchered pigs regardless of size – have only sunk in price after reaching record highs last summer after a terrible disease decimated supplies. Thankfully to the credit of resourceful pig farmers, once the virus ran its course more hogs made it to the market and the USDA projects a 5.5% rise in pork production this year at a time of slowing int’l demand.
Kevin Riordan, director of research at Capital Trading Group in Chicago, shared his fundamental analysis insight regarding the current hog futures situation by stating, “As fast as the hog futures were rising with the wrath of last year’s virus, hog prices are coming down twice as fast due to a combination increased supply and lessor demand.”
The trend for hog futures is down with no clear bottom yet in sight. All lean hog rallies should be viewed as opportunities to get in on the short side – which is where I’m at.
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 and Cotton, NASDAQ & S&P 500 Indices (These three new this week.)
DOWN Trending Futures Markets: Copper, Natural Gas, Lean Hogs, Euro-FX, Feeder Cattle, Coffee, Kansas Wheat and Sugar (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.
Demand Concerns Weakening Wheat Futures
Wheat futures initially extended their losses from yesterday earlier in the trading session because of the outlook of waning demand for domestic supplies. May Wheat futures have since rebounded and are currently .03 cents higher at the Chicago Board of Trade, and .015 cents higher at the Kansas City Board of trade (as of this writing).
Wheat futures took a significant plunge yesterday when it was revealed Egypt cancelled their tender to purchase US wheat. This is an important factor in the price of wheat because Egypt happens to be the world’s biggest wheat importer.
Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, shared his fundamental analysis insight regarding the current wheat futures situation by stating, “The Egypt factor (canceling their order to buy US wheat) is a telling factor of the problem with ample world supplies against our strong US dollar.” Plotkin added, “The seasonal factor for wheat futures is also developing.”
Wheat futures trend is technically down, but at a crossroads. The outlook for wheat futures is all bearish if you listen to the news, but this market could be bottoming if May Wheat were to trade up to $5.45 per bushel before taking out today’s lows in the very near future.
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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