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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:
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.
Cocoa Futures Rally Emerges With Chocolate Shortage
With cocoa futures rising with the current chocolate shortage, a former European banker is betting on reviving cocoa farming in the Amazon basin where the bean once flourished. Cocoa futures are up 14 points (as of this writing) in New York at the Commodity Exchange Center.
There is actually a Latin America push to get cocoa beans growing in South America in similar growing conditions than the West African cocoa farmer counter-parts. The African cocoa trade dominates the industry with 70% of the market, but the push really comes from recent drought in Africa preventing supply to meet demand.
Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, shared his fundamental analysis insight regarding the current cocoa futures situation by stating, “It appears the demand for cocoa is growing at a pace African cocoa farmers can’t keep up with.” Medina adds, “I think the South American effort comes at an opportune time to supply the ever-growing ‘chocolate business’.”
Cocoa futures trend is recently up. Although I don’t trade cocoa futures any longer, I do monitor it as it tends to coincide with my preferred confectionery market of sugar.
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.
Greek EU Concerns Help to Extend Lows on Copper Futures
Copper futures have extended their lows to prices not seen June of 2010 on the outlook of Greece leaving the European Union and possibly defaulting on debt and souring the European demand outlook. Copper futures are down over 500 points (as of this writing) at New York’s Commodity Exchange.
Apparently there are some Greek politicians that are vowing to ditch austerity measures should they win their election later this month. Last year, copper futures slid 17% on the outlook for slowing industrial metal demand from China and Europe.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his fundamental analysis insight regarding the current high-grade copper futures situation by stating, “The current situation in Greece doesn’t help the growth outlook.” Craney added, “The only silver-lining I could see for copper futures is a significant improvement in China’s way, but that will also take some time.”
The trend for copper futures is down with no bottom yet in sight. We exited copper futures we held over the weekend, but am looking for another way back in the short-side of this market.
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: CBT Wheat
DOWN Trending Futures Markets: Crude Oil, Copper, Natural Gas, Sugar, Coffee, Lean Hogs and Cotton & British Pound (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.
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