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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:
Forecasts for Bitter Cold Halt Natural Gas Futures Near Lows
Natural gas futures seem to be defining a support-base in this most recent down-trend due to forecasts bitter cold weather returning after the mild weather many have been enjoying this week. Natural gas futures are fluctuating around the $2.90 per btu’s today in New York’s Mercantile Exchange.
Later this month and into February, two-thirds of the eastern portion of the USA is predicted to have “below normal” temperatures while the low in Chicago is expected to be 5 degrees lower than normal sometime during that period. The low’s in New York are predicted to be as much as 11 degrees lower than normal. This has the potential to halt falling natural gas prices which crashed last month.
“Natural gas futures traders are taking a hard look at the forecasts for the end of the month and beginning of February,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his fundamental analysis insight regarding the current natural gas futures situation. Craney added, “If last week’s low can hold, we can easily see a return to the mid-$3.50 level of natural gas futures.”
The trend for natural gas futures is down with clear basing action in progress. Not only does natural gas futures need to hold last week’s low, but a breakout above last week’s high of $3.30 will be in order.
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 Reach Five-Month High on Obscure Growth Outlook
Gold futures have reached a five-month high in early morning trading on the outlook of a safe-haven hard-asset amid speculation of sputtering global growth. Gold futures are currently at $1,288 per ounce (up $11) in New York at the Commodity Exchange.
Over the long weekend, in Washington, DC the Int’l Monetary Fund released an aggressive retraction of their global growth forecast of the past three years. They claim a worldwide slowing of growth (except for here stateside) and that it will “more than offset” the expansion boost offered from dwindling crude oil prices. Also recently, the Swiss National Bank shook the markets last week ending a cap to their currency against the Euro which initiated this leg up for gold futures.
Kevin Riordan, director of research at Capital Trading Group in Chicago, shared his fundamental analysis insight regarding the current gold futures situation by stating, “Several factors have contributed to this rally in gold we’re seeing.” Riordan added, “More decisions from the European Central Bank are forthcoming and gold, once again, is the current safe-haven for investors.”
Gold futures trend is up with no top yet in sight. I am concerned with the lack of follow-through with gold futures bulls this morning and feel a correction is due…
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 & Soybean Oil (Both new this week.)
DOWN Trending Futures Markets: Crude Oil, Copper, Natural Gas, Lean Hogs, British Pound, Euro-FX and Feeder Cattle (Both 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.
Commodity Collapse Includes Copper Futures
Copper futures is not immune to the current commodity collapse we are all witnessing recently – predominantly with energy, food, and livestock. It is the lack of global growth that has reigned in the high prices of just about everything, copper futures is no exception (down yesterday as much as 1,450 points in New York’s Commodity Exchange).
Copper prices are down as much as 8.6% in London yesterday and down the daily limit in Shanghai, China. …speaking of which, demand weakness for the industrial metal and lower energy costs combined with worse than expected economic statistics are reportedly driving copper prices down there. Even Deutsche Bank AG claims copper demand will grow at its slowest pace since 2009.
Gerry Plotkin, a Senior Market Strategist for R.J. O’Brien in Chicago, shared his fundamental analysis insight regarding the current copper futures situation by stating, “The overall fundamentals for copper are not good and haven’t changed overnight, however, this plummet may be over exaggerated which is why we see copper up 550 points today.” Plotkin adds, “Strength in gold may be adding to copper’s temporary rally.”
Copper futures are down with no bottom yet in sight. I will require copper futures to demonstrate some type of “relief rally” before looking to get 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.
Coffee Futures Resurgence with Brazil Drought
From out of nowhere, and without warning it seems, coffee futures had an “about-face” after the nine-month low made on Friday, January 2nd, and have now signaled a possible uptrend. Coffee futures at New York’s Commodity Exchange Center are currently down 350 points from yesterday’s close, only after reaching a five-week high in the March contract earlier in the trading session.
According to a respected meteorologist in Brazil’s capital city of Sao Paulo, their coffee growing regions are forecasted to receive only one-half the normal amount of rain for the remainder of this month, and all of February. Brazil is the world’s premier grower and exporter of coffee, but the weather conditions there have created a roller-coaster ride for int’l coffee prices in the past few years.
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 coffee futures situation by stating, “Coffee (futures) is considered one of the top weather dependent futures markets.” Evans added, “With the coffee market ending 2014 in a bear market, much inventory had been depleted. With drought forecasted, supplying world demand may be a challenge.”
Coffee futures trend is technically up as of today, reversing the bear-market outlook since October. Before jumping on-board, coffee futures needs to test their January 2nd low first – as I see it 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.
USDA Reports More Supplies, Sends Soybean Futures Down Hard
Soybean futures whipsawed with crazy volatility yesterday after the USDA stated domestic soybean inventories actually increased since the last reporting. The soybean futures official news sent the market .36c lower after the report yesterday and never looked back.
The domestic inventory, according to the USDA as reported yesterday, reached just over 2.5B bushels – the most since 2006 and can be compared to the prior year’s bumper crop of 2.15+ billion bushel in the same reporting period last year. The USDA went on to say they claim overall global inventories before this years harvest (in the Northern Hemisphere) will be the highest ever recorded.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, shared her fundamental analysis insight regarding the current soybean futures situation by stating, “Domestic & int’l soybean production being larger than expected means ample supplies into the next harvest.” Levy adds, “Expect soybean reserves to build nicely now that we are experiencing record production in consecutive years.”
The trend for soybeans is down from early December. Before today, soybean futures had been in a position to breakout into an uptrend, but now I think any chance of that soon happening will take a back-seat in the foreseeable 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.
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: S&P 500 Index (New this week.)
DOWN Trending Futures Markets: Crude Oil, Copper, Natural Gas, Sugar, Coffee, Lean Hogs, British Pound and Gold & Euro-FX (both 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.
Speculators Now Coming Forward with Price Floor Predictions for Crude Oil Futures
Stories are emerging regarding crude oil futures bottom-line price floor in this incredible decent from over $100 per barrel. One hedge-fund manager’s view is that crude oil prices have already “almost” bottomed out and that “some recovery” is likely in the second-half of this year when demand picks up.
Just this past summer, crude oil futures were trading over $100 per barrel – a price well above “break-even” operational costs for energy producers. If $40 (or less) a barrel were to be the renewed “normal” as it was pre-Persian Gulf War in 1991, there is concern US and Canadian oil production cannot be sustained due to the overall cost of production.
Laura Taylor, a senior commodities broker at RJO Futures in Chicago, shared her fundamental analysis insight regarding the current crude oil futures situation by stating, “Crude oil (futures) prices still have not found a floor.” Taylor added, “There should be ample trading opportunities this entire year when crude does bounce, and then tests its lows (which remain to be seen).”
The trend for crude oil futures is down with no bottom yet in sight. We could very well see continued crude oil future prices pressured into the seasonal low time period this time next month.
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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