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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:
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.
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 Index (New this week.)
DOWN Trending Futures Markets: Soybeans, Kansas Wheat, Sugar, Corn, British Pound, Euro-currency, Japanese Yen, Crude Oil, Natural Gas, CBT Wheat, Gold and Soymeal (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.
Surging Crop Supply Extends Wheat Futures Lows
With the outlook global wheat production will reach a new record level, wheat futures continued their slide to new lows not seen in four years. Wheat futures are down another .09c from yesterday’s close as of this writing.
The good news is the global grain-glut with increasing supplies is helping to lower global food prices, as seen in the United Nations’ food costs index also nearing a four-year low. The USDA forecasts world wheat output to increase to nearly 720M metric tons for the forthcoming 2014-15 season.
Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, shared his insight regarding the current wheat futures situation, “With harvest underway in grains, expect record breaking yields that may surpass all previous expectations.”
The trend for wheat futures is in a continuing decent lower. We are short wheat futures upon the opening bell, however I do expect some type of relief rally in the not so distant 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.
Corn Futures Lower as Farmers Begin Biggest US Harvest…Ever
Corn futures retreated from yesterday’s highs today as good weather conditions help farmers harvest a corn crop that is said to be the biggest ever. Corn futures only finished the day a mere .02½c lower, but still just above its $3.35c multi-year lows.
The Maryland based “Commodity Weather Group” claims there are “no major harvest issues” for corn including any freeze threat through the first week of next month. The USDA also said last week this year’s harvest will yield almost 3.5% more bushels than last year. Corn futures have responded by dropping a little more than 19% so far this year.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his insight regarding the current corn futures situation, “Weather and yield prospects continue to favor the bears as harvest is underway. Questions about Chinese demand for U.S. corn continue to hang over the market.” Craney adds, “However, (corn futures) traders are more focused on the prospect for higher than expected yields during harvest.”
Corn futures trend is down with no “bottom formation” yet in sight. I am patiently awaiting some type of bounce in corn futures to reset a short position with lower-risk.
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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