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:
Soybean Futures Shift Trend to Up on Crushing Demand
Soybean futures managed to reach a five week high in very early trading today before doing an “about-face” by mid-session. Soybean futures are currently down .16c per bushel at the Chicago Board of Trade as of this writing.
Earlier this week the US National Oilseed Processors Association stated in an official report something that has never happened before – January saw the biggest soybean crush ever recorded in that particular month. A sign of things to come…? Not so fast, soybeans remain vulnerable with the South American crop looking good (so far).
Jeff Evans, Vice-President of the Managed Accounts Division for RMB Group in Chicago, shared his fundamental analysis insight regarding the current soybean futures situation by stating, “The report from the Oilseed Association may be tipping it’s hat for what could be expected for soybean futures this spring.” Evans added, “The biggest soybean crush in the history of ‘January’ can only mean one thing – demand.”
The trend for soybean futures has just turned up with the five week high being set. Although soybean futures have done a complete about-face since hitting those highs, I am looking for buy signals.
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.
New York’s Feds Send Gold Futures Plummeting
Gold futures are sharply lower today reportedly after the New York Federal Reserve’s index of manufacturing conditions showed improvement for prospects in February – but just not at the pace for economic growth expected. The index dipped to a level of “7.8” for this month when in fact analysts were4 expecting 8.5.
Gold futures may be at a vulnerable crossroads amid ongoing expectations for the Federal Reserve private bank to begin a campaign to raise interest-rates possibly in June. Higher interest-rates are considered bearish for gold & precious metals as an investment because it competes with yield-bearing assets when rates are rising.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her fundamental analysis insight regarding the current gold futures by stating, “All eyes for gold investors will be on tomorrow’s release of the minutes of the last Fed meeting.” Levy added, “Maybe it will provide a clearer picture when interest-rates will possibly rise.”
The trend for gold futures is down once again after a brief rise last month. There is no bottom yet in sight for gold futures, however, a base of support comes in at the $1,170.00 level 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: Russell 2000 Index (New this week.)
DOWN Trending Futures Markets: Copper, Natural Gas, Lean Hogs, Euro-FX, Feeder Cattle, Coffee, Crude Oil, Kansas Wheat and Japanese Yen, Soymeal & Soybeans (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.
Bloomberg Survey: Agricultural Commodity Futures Prices Most Accurate, Crude Oil Prices Least Accurate
I had a chance to review a video from last October in which a gal from the Bloomberg News organization reported on a survey taken regarding commodity prices. The survey concluded that commodity prices are wrong 27% of the time, but there’s a little more to the story…
A two month survey last year of 270 “traders” revealed the least confidence in actual commodity “pricing,” and the most confidence in currency & stock prices probably because the latter two are more publicly involved and regulated, whereas commodity pricing is not. However, and this is what caught my attention, another conclusion of the survey revealed trader’s consensus is that agricultural commodities are the most accurately priced (more stable), and crude oil prices are the least accurate – as we all know from the unstable gas prices at the pump.
Laura Taylor, a senior market strategist at RJO Futures in Chicago, shared her fundamental analysis insight regarding the current commodity futures pricing situation by stating, “The whole world comes to the Chicago Board of Trade and Mercantile Exchange for their agricultural products because of the solid reputation they have built between the farmer and the users.” Taylor added, “With energy products, there may simply be too many ‘middle-men’ involved causing prices to fluctuate erratically – not surprising results from the survey.”
It doesn’t surprise me that the agricultural commodity futures markets are considered the most stable of all futures markets. The grains are the most favorable market for me trade and there is good reason why I stopped trading crude oil and other energy markets in the last decade…
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.
Cotton Futures Uptrending on Higher Exports
Cotton futures reached seven-week highs yesterday in a newly emerged up-trend based on less cotton mill usage and increased exports. Yesterday’s USDA Crop Production report revealed 2014/15 domestic cotton estimates showing less mill production and the higher exports compared with last months data. Cotton futures closed down today about 26 points from yesterday’s seven-week high at New York’s Commodity Exchange Center.
More insight from yesterday’s report also showed estimated production and and total inventories unchanged from the last estimate in January. However, there was slower than expected consumption through December, but that balanced against stronger than expected foreign sales and demand for medium to high-grade cotton.
Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, shared his fundamental analysis insight regarding the current cotton futures situation by stating, “Based on what appears to be 31% of world market share on cotton, we may very well be in the beginning stages of something bigger for cotton futures.” Medina added, “This level of US exports for cotton is the most in four seasons, so demand is there.”
Cotton futures have rolled over to a newly established up-trend just last week. I am cautiously optimistic on being long, hover cotton futures have not had a significant test of their lows from last month which concerns me.
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 Crop Progress Report Halts Rally in Wheat Futures
Wheat futures had rallied into today’s USDA crop production report, but the reality of ample global supplies and a stronger dollar may have thrown cold water the temporary relief rally. Wheat futures are currently down .07 cents at the Chicago Board of Trade just over an hour after the big report.
It appears speculators had been readjusting their positions yesterday ahead of today’s closely followed “supply & demand” report after rallying about .40 cents from the February 1st low. The consensus was US wheat (futures) prices had dropped to an attractive level that would spark demand for US supplies. Wheat is the USA’s fourth biggest cash crop, behind corn, soybeans, and…”hay.”
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his fundamental analysis insight regarding the current wheat futures situation by stating, “The sentiment well before today’s big report was wheat was definitely oversold, and a correction (higher) was due.” Craney added, “It’s hard to overcome the fundamental situation of plenty global wheat supply and a recent strong US Dollar pricing out our domestic supply.”
The trend for wheat futures is down – technically, fundamentally, and seasonally. This relief rally we have seen this past week has been what I had been looking for to re-enter the short side of wheat futures (albeit an early entry for me).
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 and 10yr. T-Notes (New this week.)
DOWN Trending Futures Markets: Copper, Natural Gas, Lean Hogs, British Pound, Euro-FX, Feeder Cattle, Coffee and Crude Oil, Kansas Wheat & Soybean Oil (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.
Corn Futures Relief Rally at a Crossroads
Corn futures have bounced back over .20c from their recent lows, but the outlook for the grain remains uncertain with other factors involved. Corn futures are currently at $3.85 per bushel (as of this writing) at the Chicago Board of Trade, up .015 cents from yesterday’s close.
For the time being, the US Dollar is providing meager support being down just more than one-half percent – a lower dollar provides more buying leverage for importers. However, despite this recent “relief rally” in the corn market, corn remains vulnerable due to dwindling support of ethanol-based fuel, and with ample supplies we could even see further drops in gasoline prices as well.
“It seems not only are corn futures influenced by weather, but politically influenced as well,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, shared his fundamental analysis insight regarding the current corn futures situation. Riordan added, “The ethanol mandate has the ability to send corn futures lower as well as the strong dollar we are seeing.”
Corn futures trend is down with no clear bottom yet in sight. I am looking for a way into the short side of this market soon – hopefully my patience with corn futures will pay-off.
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