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:
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: Feeder Cattle and NASDAQ
DOWN Trending Futures Markets: Soybeans, Kansas Wheat, Sugar, Corn, British Pound, Euro-currency, Japanese Yen, CBT Wheat, Gold, Soymeal, Cotton, Copper, Silver and Natural Gas, Russell 2000 Index & Soybean Oil (These three 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.
Brazil Crop Concerns Send Coffee Futures Soaring
The drought in South America that previously sent coffee futures soaring nearly 90% this year is coming back for an encore. Arabica-coffee futures have blasted-off to the upside all this week and today the technical trend has reversed to the upside.
A crop-forecaster in Brazil states the coffee crop is entering the main flowering stage that will be ready for harvesting in May, however, coffee-farmers are expecting a two-week dry-spell this month that will most likely hurt crop. What this means is that a persistent lack of moisture presents irreversible damage to the coffee trees – which is exactly what coffee futures are responding to.
The technical trend for coffee futures is now “up” as of today (as previously mentioned). Now I will need for coffee futures to pullback, or consolidate, before initiating any position. Coffee futures has been a good market for me this year, but the initial margin requirement is so high it requires me to be cautious with the trades.
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.
Cotton Futures Can Top $1 In a Decade
The largest (raw) cotton trader told an audience in Dubai today he thinks cotton futures can top $1.00 a pound within a decade as fashion trends shift back to natural fibers. Cotton futures were up seven-tenths of .01 cent today in New York, hovering just above the .61 cent support level for the last week.
Synthetic fibers have taken shares away from cotton and natural fibers recently, but this trend is waning with cotton demand forecasted at 3.7% growth annually. USDA data, however, showed cotton demand in the 2013-14 marketing year which ended July 31st climbing 1.9%.
Kevin Riordan, director of research at Capital Trading Group in Chicago, shared his insight regarding the current cotton futures situation by stating, “The long term trends in cotton (futures) demand suggests an increase in demand. So while over near term cotton prices will likely go lower to clear our excess inventories, (but) over the long haul cotton (futures) prices should work their way back up towards $1.00 a pound.”
Cotton futures trend is down with no bottom yet in sight. It appears cotton futures is poised for a relief rally, but I am still looking to be short this market with the mid-50’s the first target area.
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 Seeing Bigger Supply Than Forecast Sends Corn Futures Even Lower
Corn futures have once again extended their lows – now to five-year lows – after the USDA revealed this morning domestic corn inventories before the start of this year’s harvest were bigger than analysts previously forecasted. Corn futures appeared to have factored-in the additional 55M bushels after the report sending corn to prices not seen in five years.
Corn futures continue their decent with three months of favorable weather boosting the outlook for yields only two years after the worst drought in US history sent corn futures to record high prices. Now, American farmers are set to collect a record harvest in the very near future.
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, shared his insight regarding the current corn futures situation by stating, “This year’s record corn crop on top of what was left over from last year has the silos swelling. We have not seen any real uptick in demand for corn since the rest of the gain market in particular wheat has been falling at about the same rate.”
The trend for corn futures is nothing but down. I am expecting some type of relief rally soon, however, we remain short corn futures 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.
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: Feeder Cattle, NASDAQ and the S&P 500 Index (New this week.)
DOWN Trending Futures Markets: Soybeans, Kansas Wheat, Sugar, Corn, British Pound, Euro-currency, Japanese Yen, CBT Wheat, Gold, Soymeal and Cotton, Copper, and Silver (These three 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.
Soybean Futures Extend Lows on Raised Outlook
The German-based research group Oil World claimed today an even higher forecasted world production of major oilseeds (by over 4%) based on the outlook of increased soybean estimates here in the US and in Brazil. The consensus was 3.7% in a previous estimate, but is now revised upward to 4.3% with soybean futures responding with new lows today.
Amid such production estimates, soybean futures have lost nearly 30% since this time last year and has been amongst the worst performing commodity markets. The United States is the biggest grower of soybeans, and is the nation’s biggest cash crop.
“The futures price for soybeans could fall to the 920 level with the ideal weather promising a bumper crop. The bounce may come if there is some early frost expected around the bend otherwise 920 will be seen before you see 1000 again,” said Laura Taylor, a senior commodities broker at RJO Futures in Chicago, sharing her insight regarding the current soybean futures situation.
Soybean futures trend is clearly down and we are short this market since last week. We are about .40c away from the soybean futures target and there is no news in the foreseeable future that can rally this market before harvest is completed (in my view).
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.
Wheat Futures Reverse on Raised Global Production Forecast
Wheat futures have reversed course today after it was pointed out by the Int’l Grain Council that global wheat production will, once again, be revised higher due to more favorable outlook for wheat supplies from the European Union and the Ukraine region.
The ICU now says with increased wheat production coming from Europe, the worldwide wheat output will rise by four-million metric tons for this forthcoming 2014-15 season over last months forecast – and 0.6% more than the previous year. At this time, most Northern Hemisphere wheat farmers have finished harvesting their wheat.
Wheat futures trend remains down with no bottom in sight. Although wheat futures made new lows today, there was an absence of follow-through to the downside making me believe there may be some choppiness ahead…
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.
China’s Restrictions Takes Cotton Futures to a Five-Year Low
It’s a complicated situation for cotton futures with the current outlook of China restricting its future cotton imports and possibly leaving more supply on the table with inventories already at highs. After all, they are the world’s biggest buyer and producer of cotton.
To be specific, China stated (day before yesterday) it will impose a restriction on its cotton imports during 2015. Here in the US, favorable weather has boosted the prospects for an abundant harvest and cotton futures have responded by dropping 27% year-to-date.
“Cotton futures is finding pressure from China’s announcement that it will cut back on imports next year and is in the process of getting rid of some of it’s current stockpile. Additionally the U.S. harvest is progressing at a normal rate, but the crop good to excellent ratings are well ahead of last year,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, sharing her insight regarding the current cotton futures situation.
The trend for cotton futures is down, and any bottoming action that was forming is now negated with a breakout to lower lows just today. Cotton futures next target – in my work – shows initially the mid-.55c range followed by the mid-.51c area. We continue to be short cotton futures from last 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.
Recent Comments