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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:
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: Corn, CBT Wheat, S&P 500 Index and Russell 2000 Index (New this week.)
DOWN Trending Futures Markets: Crude Oil, Copper, Natural Gas, Sugar, Coffee and Lean Hogs & Euro-FX
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 at Two-Year Low on Mild Weather
Natural Gas futures have fallen to lows not seen in two-years with mild weather and record production set to expand an already stockpile surplus. Natural Gas futures settled yesterday near $3.16 at the New York Mercantile Exchange yesterday.
At this time, natural gas futures happens to be the worst performing market that makes up the 22 commodity futures markets in the Bloomberg Commodity Index as this futures market has dropped 9% only yesterday. Government data shows natural gas stockpiles 47B more than this time last year and actually “higher” than levels this time last year (not seen since January 2012).
“With the anticipation of a cold winter boosting demand for natural gas waning, this market has yet to find a bottom,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, sharing his fundamental analysis insight regarding the current natural gas futures situation. Riordan added, “The weather models now are confirming speculators outlook for demand.”
After yesterday’s breakout lower, natural gas futures trend is down with no bottom yet in sight. Natural gas futures is a market I do not trade, but it is nice to know as consumers we should not be hit in the wallet like previous years – we’re pocketing even more of our earnings with another down-trending 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: Corn, CBT Wheat, KCBT Wheat, 10yr. T-Notes and S&P 500 Index (New this week.)
DOWN Trending Futures Markets: Crude Oil, Copper, Natural Gas, Sugar, Coffee and Lean Hogs & 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.
Russian Shipment Slowdown Spikes Wheat Futures
Wheat futures is reflecting the plight of the Russian Ruble, it seems. Since the ruble is spiraling downward, increasing the costs for food items – mainly bread – the Russian government is taking measures to slow the release of grain from its ports, which in turn is sending wheat futures prices at the Chicago Board of Trade to wheat prices not seen since May.
A Russian spokesperson stated today their country’s “main goal is to replenish the domestic market” and they are reportedly doing this by interfering with the certificates needed by grain buyers and sellers once sanitary inspections have been completed. At the same time, Russia’s president has warned his countrymen this current economic crisis could drag on for as long as two years, so this might provide a better understanding of their fight to ease sky-rocketing food prices.
“It’s understandable for a sovereign nation to help stem food inflation,” said Jeff Evans, a Senior Broker and Vice-President of the Managed Accounts Division for RMB Group in Chicago, sharing his fundamental analysis insight regarding the current wheat futures situation. Evans added, “This current leg up in wheat futures has been due to the economic crisis they’re experiencing (in Russia). Fear and uncertainty always plays a big role in price spikes.”
Wheat futures trend is up with no top yet in sight. I would prefer wheat futures to correct with a significant pull-back in price before getting back long, but I will look for other ways to enter as well.
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 Strong as China Lifting Import Ban on GMO Corn
Corn futures remains at lofty levels after the Chinese government is said to have lifted its ban on genetically-modified corn. China has recently purchased 900,000 metric tons of corn in lieu of lifting this ban.
A report today from the China National Grain & Oils Information Center claims their country has contracts for 15 cargoes of “dried distillers grain” for shipment between this month through the first quarter. China is now the largest buyer of this corn by-product otherwise known as “DDGS” – the result produced once starch has been stripped from corn for ethanol production use.
“All eyes are watching how efficient the Chinese are in using this new product to their economy,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, sharing her fundamental analysis insight regarding the current corn futures situation. Levy added, “If this new product is useful to the Chinese, the sky is the limit to what they can do with US corn.”
The trend for corn futures has been up since early October with no top yet in sight. I exited our long corn position one week ago today just before the monthly crop report in anticipation of the “December seasonal low” which hasn’t happened yet. I am still looking for a way back in the long side of corn 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.
Regulations to Accommodate Hens to Affect the Egg Market
The egg market is in for a shell-shock next month when legislation from California catches-up to everybody from the producer to the consumer. Voters in the state approved a law which calls for egg-laying hens to have “more space” in their hen houses to ensure the birds are allowed to lay down, stand up, extend their wings, and dance around (I cannot make this up!).
The price of USDA Grade AA Extra Large, and Grade AA Large, eggs may have been .02c slightly lower yesterday in New York’s cash market, but starting next month when the legislation comes into effect we should start seeing prices holding to higher over time. Farmers around the country that sell eggs to the Golden State will either have to comply with larger cages for their birds, or have less birds in existing cages (which implies culling their flock).
“With farmers selling eggs to the country’s most populous state, it can only mean higher prices for the consumer,” said Laura Taylor, a senior commodities broker at RJO Futures in Chicago, sharing her fundamental analysis insight regarding the current egg market situation. Taylor added, “Who elects California legislators…chickens, or people? Who are California legislators elected to serve…people, or chickens?”
On a national scale, wholesale egg prices average a record $2.77 per dozen which is up 34% from the year before. With this new law coming into effect, a Iowa university professor claims the amount Californians themselves will pay can be as much as 20% within three to six months into next year.
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: Corn, CBT Wheat, KCBT Wheat & 10yr. T-Notes (New this week.)
DOWN Trending Futures Markets: Crude Oil, Copper, British Pound, Japanese Yen, Natural Gas, Sugar and Coffee (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.
Butter Futures Expected Lower With Milk Production Increase
Butter eaters around the world will delight with an extra helping as wholesale milk prices continue to drop from all-time highs in September. Dairies have kept the milk flowing like never before the former high milk (futures) prices have helped to expand production around the world.
USDA data shows farmers have taken advantage of the spike in milk prices as well as low animal-feed costs which has sent production for the year ending in October up almost 2% from the same period last year. Top producers around the globe are contributing to the global milk glut with our domestic dairy exports dropping to a year and a half low.
“The all-time milk (futures) highs this past September drew a tremendous response from dairies “down under” and Europe,” said Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, sharing his fundamental analysis insight regarding the current milk futures situation. Medina added, “With more milk & butter on the int’l market, our domestic brands have backed-up putting pressure on milk (futures) & butter (futures) prices. That simple.”
As with falling oil (lowering transportation costs) and overall commodity prices, milk futures and butter futures are not immune to glut prices. We don’t trade butter futures or milk futures from the Chicago Mercantile Exchange, but this human interest story is out to assure the financially “tapped-out” public that the pendulum does indeed swing the other way!
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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