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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:
Harvest Delays Spike Soybean Futures to Three-Week Highs
Soybean futures have spiked to a three-week high today on the outlook that precipitation will cause a delay of the domestic harvest. The US is the world’s largest producer of soybeans, so soybean futures are quite sensitive to domestic soybean news.
Although drier weather is expected closer to the end of the week, the rain in certain areas of the Mid-West will hinder the soybean harvest with any severe weather said to be unfavorable for the mature soybean crops. The USDA reported earlier this month that this year’s oilseed harvest is trailing the average of the previous five years.
“The soybean futures are responding higher to the heavy rains and near freezing temperatures across much of the Midwest, that is keeping the farmers from being able to get the combines into the fields to harvest their crops,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, sharing her insight regarding the current soybean futures situation. Levy added, “Additional support is coming from the potential for higher overseas demand for the large U.S. (soybean) crop.”
Soybean futures trend is technically down, however a bottom appears to possibly being put in place. I am still looking for another test of the low for soybean futures, but acknowledge we may have had our last short trade if volatility doesn’t contract at these upper levels.
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
DOWN Trending Futures Markets: Soybeans, Kansas Wheat, Sugar, Corn, British Pound, Euro-currency, Japanese Yen, CBT Wheat, Gold, Copper, Natural Gas, Russell 2000 Index, Soybean Oil and Crude Oil & Lean Hogs (These two 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.
Sugar Futures May Reverse on Looming Shortage in Brazil
With drought cutting into supplies in Brazil, the global sugar market is shaping up to be in its first deficit in half a decade (claims a top exporter and producer there). Sugar futures have recently climbed to .17 and one-fifth cent a pound in the larger rallies in two months.
Sugar futures have plummeted over 50% from their highs since 2011 as farmers planted more sugar cane, but now both Brazil and India are considering reducing sugar output (to reduce global reserves) for the first time in four years, the USDA estimates. Also, Brazil – which a forthcoming presidential election soon – has already raised the amount of sugar-ethanol used in fuel and may soon raise gasoline prices there.
“The current drought has experts in the area predicting up to a 10% deficit, which would be the first in a handful of years,” said Laura Taylor, a senior commodities broker at RJO Futures in Chicago, sharing her insight regarding the current sugar futures situation. Taylor added, “With sugar used for ethanol in that part of the world, and once the Brazilian elections are behind us and the government there set ethanol prices, we could see a significant low in sugar prices.”
The technical trend for sugar futures is at a crossroad. Sugar futures have technically crossed the uptrend threshold (in my work), but appear to be testing their recent lows. I must approach sugar futures with caution.
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.
Outlook for Bumper US Crop Causes Corn Futures Pause
Corn futures have paused after it’s biggest relief rally in seven weeks on the outlook the USDA will increase its forecast for this year’s domestic harvest. The U.S. is the world’s biggest producer and exporter of corn.
The USDA will release its updated estimates on Friday and analysts are already estimating output to be revised upward (albeit slightly). There is a twist to this story, however, that explains this current rally…my source explains to me there is much reported rain in the ground preventing extracting corn for harvest.
“Oct 10th provides yet another look at the USDA Supply/Demand report at this critical time in the U.S grain harvest,” said Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, sharing his insight regarding the current corn futures situation. Medina added, “Producers are anxious to get the harvest completed but are being met with too much rain in many parts of the country.”
Gold futures trend is still technically down. I view this relief rally as a temporary event and am looking for short signals.
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 Up a Second Straight Day with US Dollar in Retreat
Gold futures may have found solid support as buyers have stepped-in for two days in a row now. The US Dollar’s decline may be boosting the precious metal’s appeal as an alternative investment, safe-haven.
In the relationship with 10-yr. T-Notes, the dollar slipped slightly with treasury’s and against most other major currencies. Compared with gold, it’s an inverse relationship – as the dollar has lost ground, gold futures climbed the most it has in two months.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his insight regarding the current gold futures situation by stating, “As volatility in the stock market picks up and the dollar pulls back from its highs, gold has become more attractive to investors. A continued pull back in the dollar index could lead to additional gains for gold.”
Gold futures trend is still technically down. I view this relief rally as a temporary event and am looking for short signals.
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 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.
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