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:
Pork to Surpass Beef Production a First in 60 Years for Livestock Futures
High beef prices and rising demand for pork products as a cheaper alternative are setting the stage for beef to take a back-seat in production (for pork) for the first time since 1952. Both livestock animals have been hit hard lately with drought, high feed costs, and disease these last few years, but hog herds have rebounded sooner and circumstances have led to the breeding of more pigs and bigger animals.
The USDA estimates domestic pork output to increase 4.6% this year (to an all-time high) while at the same time cattle ranchers are still recovering from the 2012 drought that has brought cattle production into what will be a 22-year low. Just over a month ago, for the the fourth-quarter 2014, the USDA reported the breeding-sow herd posted the biggest increase since 1998 with the total hog population jumping 2% from a year earlier.
“Nobody could have ever predicted these circumstances with the beef to pork ratio this time last year,” said Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, shared his fundamental analysis insight regarding the current livestock futures situation. Plotkin added, “With the domestic cattle herd at 60-year lows, disease plaguing the pork industry, and high feed prices it is remarkable at least one side of the livestock industry is rebounding.”
The trend for both cattle futures and hog futures are down with no clear bottom yet in sight. However, if last week’s lows hold in both feeder cattle and lean hog futures, then we can at least see some type of relief rally before another test of yesterday/today’s low.
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 Find Multi-Month Support at Bargain Prices
Corn futures, soybean futures, and wheat futures have all found temporary support after rallying anywhere between .15c-.40c in today’s session at Chicago’s Board of Trade. Importers around the world had been on the sidelines as US grain supplies had been viewed as overpriced with a climbing dollar, but that all changed today.
The US grain markets were at four-month lows within the last two trading sessions – wheat futures finding lows not seen since early October, corn futures retracing back to November lows, and soybean futures also rallying from lows not seen since October. With soybeans, reported weakening demand from China, and ample South American supplies, have been a black cloud over the soybean market since late last year.
“The US grain markets were due for some type of relief rally in the midst of bearish USDA and older news,” said Jeff Evans, a Senior Broker and Vice-President of the Managed Accounts Division for RMB Group in Chicago, shared his fundamental analysis insight regarding the current grain futures situation. Evans added, “I wouldn’t be too excited about a prolonged rally with these markets because a test of the recent lows should follow.”
All grain futures trends are down with no bottom yet in sight. I am looking to sell short these grain markets, especially once they make a return back to their moving average I follow.
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: Gold and 10yr. T-Notes (New this week.)
DOWN Trending Futures Markets: Copper, Natural Gas, Lean Hogs, British Pound, Euro-FX, Feeder Cattle, Cotton, Coffee, Sugar, Japanese Yen and Soybeans (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.
Foreign Exporters & Domestic Ranchers Helping Push Wheat Futures Lower
Wheat futures is playing a cruel joke on our domestic farmers despite having the smallest crop harvested recently for the past three years. Wheat futures are finding lower prices because of outside factors such as surging wheat output overseas and a switching in feed in domestic use.
Now that feed prices have come back down to reality, US cattle ranchers have resumed using more corn in their livestock’s feed – which makes sense. What makes more “cents” is the fact our strong US Dollar is promoting other nations to look for wheat supplies elsewhere where the supply is much more plentiful – and less expensive.
“The obvious choice for wheat importers are to buy where their currency is the strongest, and wheat supplies abound,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her fundamental analysis insight regarding the current wheat futures situation. Levy added, “As long as our domestic wheat prices remain uncompetitive, we can expect lower (wheat) futures prices.”
The trend for wheat futures is down with no bottom yet in price. I will need some type of relief rally before getting short wheat futures.
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 Poised for Further Drop on Iraqi Oil Surge
Crude oil futures are hovering just below $45 per barrel and appear for a breakout lower with the forthcoming revelation. The whole breakdown of crude oil prices from OPEC members competing for global customers is about to accelerate with Iraqi oil production.
Oil production from Iraq is actually said to be climbing from a 35-year high as the southern oil fields remain untouched by ISIS militants, and adds a growing supply of oil from the Kurdish region (up north) to its exports. To match buyers with the added production will mean only one thing – offering more attractive incentives to buy than competing rivals of the OPEC nations.
“We have been led to believe the price war of crude oil has been between the US and Saudi Arabia, but now we are realizing perhaps the bigger explanation with an inter-OPEC rivalry,” said Laura Taylor, a senior market strategist at RJO Futures in Chicago, shared her fundamental analysis insight regarding the current crude oil futures situation. Taylor added, “All OPEC members have defended their market share (by cutting prices), but with Iraq adding volume to inventory can lead to another leg down in crude oil futures.”
Crude oil futures trend is down with no clear bottom in sight. A decisive move below $45 per barrel can send crude oil futures to its next support level of $40.
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 Chinese Growth Seen Slowing, Copper Futures Near Five-Year Low
Copper futures is realizing the repercussions of the world’s largest industrial metal consumer’s industrial production slowing down. China’s industrial growth has seen its smallest gain in almost 15 years and copper futures is reflecting revelation currently down 900 points in New York’s Commodity Exchange.
Chinese government data reports last year’s metal-consumer’s earnings may have increased, albeit a meager 3.3%, but last month profit slid by 8% – the third straight month of declines. To make matters worst for copper futures, here in the US durable goods orders also fell for the fourth consecutive month and the US is the second biggest user of copper.
“Copper prices are getting a one-two punch from the world’s top end users of the (industrial) metal,” said Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, shared his fundamental analysis insight regarding the current copper futures situation. Medina added, “Copper futures seem to be looking ahead to demand and it’s just not there.”
The trend for copper futures is nothing but down with new lows made just yesterday. We had a couple of copper futures trades earlier this month, but I need volatility to contract some before getting short this market once again.
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: Gold and Silver
DOWN Trending Futures Markets: Copper, Natural Gas, Lean Hogs, British Pound, Euro-FX, Feeder Cattle and Cotton, Coffee, Sugar, Japanese Yen, Soy Oil & Soymeal (These six 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 Lower on Int’l Grain Council’s Supply Outlook
Corn futures are down for the second trading session in a row following the Int’l Grain Council’s speculation that global corn output will exceed another forecast from November. The improved prospects for more corn output is due to South American production which raises the corn estimate for an eight time now.
The London-based group claims that larger corn crops around the globe will put inventories at the end of this current season to levels not seen in 30 years. The group made this claim when they realized corn farmers will reap nearly 10M tons more than previously forecasted.
“Despite the solid rise in consumption, corn futures are reacting to global competition and more than enough supply,” said Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, shared his fundamental analysis insight regarding the current corn futures situation. Medina adds, “To know all these factors, plus the US Dollar at high levels not seen since 2009 (a high-dollar is bearish for US exports) still lead to 30-year high stockpiles is very bearish for corn futures.”
Corn futures trend is technically “up” in my study and research. This can all change for corn futures if they were to take out $3.75 per bushel this week. We’re about a dime higher as of this writing.
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