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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:
Supply Outlook Takes Wheat Futures to Two-Week High
Wheat futures are really finding traction after Tuesday’s USDA report revised domestic and global wheat inventories lower. Both hard-red winter wheat, and the soft-red winter varieties broke out to highs not seen in over two weeks at the Chicago Board of Trade, and the Kansas City Board of Trade, up .085 & .055 cents per bushel (respectively).
This is five trading sessions in a row that wheat prices have been higher before and after the USDA report. The revision’s, however, are only slightly less revised (in my opinion) and the spike higher (.25 cents from their recent lows only last week) seems to be an exaggeration of the report.
“Nothing moves these grain markets as consistently as USDA reports, and this current wheat (futures) spike is a testimony to just that,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, sharing his fundamental analysis regarding the current wheat futures situation. Craney added, “…a combination of (wheat futures) short-covering and a needed relief rally if you ask me.”
Wheat futures trend is clearly down with no clear bottom formation in sight. I personally view wheat futures current rally as an opportunity to reset short positions when the market decides to test last week’s bottom.
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.
Corn Futures Grind to One Week High a Day After USDA’s Revised Forecast
Corn futures have managed to work its way to a seven-day high one day after the USDA revised its outlook for domestic and global stockpile supply lower. Corn futures came a quarter cent from reaching $3.94 per bushel in earlier trading, and currently at $3.92 at the Chicago Board of Trade.
The USDA now affirms our domestic inventories to be 50M bushels less than their previous estimate at the end of this 2014-15 growing season. The downward revision is believed to be reflective of increased feed demand from livestock producers and from overseas.
“It’s hard to argue against the demand for US corn with a stronger US dollar affecting its price,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, sharing his fundamental analysis regarding the current corn futures situation. Riordan added, “The fact that both domestic and int’l inventories were reduced lower should be enough proof and hopefully out of this sideways trading action.”
The trend for corn, albeit technically down, has indeed been trading “sideways” for about a month and a half now. When corn futures finally decides it’s direction and breaks out, the move could be substantial (from my experience).
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 Revisions to World Corn & Wheat Stockpiles a Surprise to Grain Markets
Grain markets such as corn futures & wheat futures were caught off-guard today when the USDA made surprise revisions to these two grain’s global stockpiles because of signs there is improving grain demand. Both grain futures are hovering near “unchanged” for the day (as of this writing) at the Chicago Board of Trade after both grain markets have been trading on both sides of the open today.
The USDA forecast for corn stockpiles was actually less than the lower estimates of expert analysts. The domestic stockpiles of wheat were also lowered causing both of these markets in the grain complex to temporarily rally.
“The big surprise of the day is demand for corn is more than what has been expected,” 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, “Feed grain prices are still relatively low and that is a plus for our livestock producers with growing herds.”
The grain complex is a mixed-bag at this time: wheat futures trend is down with no bottom in sight; corn futures have been trading sideways for the past 1.5 months; and soybean futures are technically up, however taking out Friday’s low (with follow-through) resumes the overall down-trend. No correlation, it seems, with grain futures at this time.
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: Cotton
DOWN Trending Futures Markets: Natural Gas, Lean Hogs, Coffee, Kansas Wheat and Crude Oil, Copper, Sugar, Japanese Yen & Soy Oil (These last five 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.
Soybean Futures Slump as Brazilian Export Concerns Ease
Soybean futures are in the midst of four consecutive down days erasing all gains from its newly established up-trend from the latter-half of February. Soybean futures are down another .07 cents at the Chicago Board of Trade (as of this writing) currently at $9.87 per bushel – from Monday’s high of $10.39.
Soybeans had initially rallied reportedly because a major trucking strike in Brazil – the world’s second-biggest soybean exporter – caused major concern over a possible disruption of exports. Also weighing heavy on soybean futures is the strong US dollar as this diminishes the purchasing power of importers around the world.
“Apparently the strikes in Brazil are said to be diminishing easing concerns about soybean exports,” said Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, sharing his fundamental analysis regarding the current soybean futures situation. Evans added, “Whatever the concerns about the export prospects are in South America, the strength of the US dollar is proving to be the final word in soybean prices.”
Soybean futures trend is technically up at this time, but in the overall picture on the soybean charts illustrates a “sideways” trending market for the past 4.5 months. When soybean futures finally decide which way to trend, the breakout could be substantial because in my experience the longer the sideways action is, the more decisive the breakout is…
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.
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.
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