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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:
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.
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.
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