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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: Coffee & Feeder Cattle (New this week.)
DOWN Trending Futures Markets: Soybeans, Kansas Wheat, Sugar, Corn, British Pound, Euro-currency, Japanese Yen and Crude Oil, Cotton, Natural Gas & CBT Wheat (Four 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.
U.S. Crop Seen Large Sends Corn Futures Lower
Corn futures continue to plummet for a second day to prices not seen in four years. It is still being discovered that the corn crop conditions have improved and this is adding to the expectations for corn production this year to be the biggest ever.
Earlier this week, the USDA stated as of August 31st, nearly 74% of our domestic corn were rated “good to excellent condition” – the best week for corn since 1994! Other industry analysts insist the actual corn output will exceed the USDA’s estimate.
“Everyone was expecting a bumper crop with ideal growing conditions since the crop was planted. December Corn (futures) hit its short term objective today at 343 3/4 . A close below that level should bring (corn) prices down close to the 300 level,” said Laura Taylor, a senior commodities broker at RJO Futures in Chicago, sharing her insight regarding the current corn futures situation.
The trend for corn futures is in the midst of finding new lows in its downtrend. We are short corn futures with the seasonal tendency this time of 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.
Grain Futures Lower on Waning Tensions in Black Sea Region
Both corn futures and wheat futures are significantly lower today with the improving prospects for Black Sea grain exports. The outlook with lower grain futures is that the tensions between Russia and Ukraine will ease.
Both leaders in these two countries are making an earnest effort to see to it this problem is resolved as amicably as possible, according to President Putin’s spokesperson. Grain shipments have continued uninterrupted throughout this whole ordeal, and thankfully so since 21% of all wheat exports around the world originate from these two countries.
“I can understand the view of bearish grain (futures) markets if the two countries can reach an agreement, but it’s still a ‘wait and see’ situation until its completely resolved,” said Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, sharing his insight regarding the current grain futures situation.
Corn futures and wheat futures trends are both still down with no bottom formation yet in sight for corn futures. Wheat futures appear to be putting in a double-bottom from last month’s low.
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.
Demand by World for Palm Oil Can Boost Soybean Oil Futures
Soybean oil futures have plummeted to prices not seen since 2002 and should be near a bottom in part by increasing palm oil demand increasing by importers in Europe, according to Oil World. Soybean oil futures reached new lows even today just below the .32c level.
The Hamburg research group claims in the first-half of this year, palm-oil imports from the EU rose to a record of just a little more than 3.33M metric tons – about 3% more than in the first-half of 2013. Oil World’s report delivers a belief in a “near-bottom” for the cooking oil because of low global stockpiles.
“Low soybean oil (futures)prices have caused an increase in European demand in the first half of 2014. We believe the low prices for year have either already occurred or will occur very shortly,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, sharing his insight regarding the current soybean oil futures situation.
The trend for soybean oil futures is clearly down with no bottom yet in sight. I am compelled to continue taking each short trade until the overall soybean oil futures picture changes.
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: Coffee (New this week.)
DOWN Trending Futures Markets: Soybeans, Lean Hogs, Kansas Wheat, Sugar, Corn, British Pound, Euro-currency, Japanese Yen
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 Breaks Out to 3-Week High on Black Sea Region Concerns
Wheat futures continue to grind higher with higher highs and higher lows since basing from late last month. Wheat futures have risen to a three-week high on the outlook of supplies from the Black Sea area could be compromised with tensions escalating between Russia and Ukraine.
The Commercial Traders Index monitored each week illustrates wheat futures speculators cutting away from short positions for the last three weeks. According to the USDA, the Black Sea region accounts for 21% of all global wheat exports.
“Fears of additional Russian and Ukraine fighting going into the long weekend gave the wheat market a boost. Look for continued (wheat futures) volatility with conflicting reports coming out of the Black Sea region,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, sharing his insight regarding the current wheat futures situation.
Wheat futures trend is technically “down” at this time, but as I mentioned in the opening comments there is a very strong base where it appears there has been a “turn-over” from short, to long, speculating. I need a clearer picture to unfold, but I am looking forward to the change in trend upward when it comes!
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.
Shortages to Ensure Recovery in Prices Still Not Enough for Sugar Futures
Sugar futures is in a unique situation with “price discovery” with supply and demand, according to the Int’l Sugar Org. They are of the opinion that before sugar prices can recover significantly, global sugar consumption needs to be more than three to four times what the projected supply will be.
The senior economist for the I.S.O. claims the global market should have a surplus of only 1.3M tons starting in October and a small deficit the following year. In October, it will start the fifth-year of a world-wide sugar glut.
“Sugar supplies are so high that for sugar prices to recover in any significant way we will need close to a 3-4 million ton deficit in consumption versus supply,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, sharing his insight regarding the current sugar futures situation.
The technical trend for sugar futures remains down with no bottom yet in sight. This has become a tricky market in the fact that in can be weeks before sugar futures retraces enough to “sell the rallies.”
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.
Coffee Production in Brazil Set for Longest Decline in Almost 50 Years
Coffee futures are once again poised for more upside action as prolonged drought in Brazil is claiming much of that nation’s coffee crop. Coffee farmers are preparing for the worst as Brazil heads for its first three-year production decline since 1965.
Production from the world’s top-grower of the Arabica Coffee variety is expected to drop as much as 18% (from last year at this time) when the harvest ends next month – this coming from a 3.1% decline only last year according to Brazil’s National Coffee Council’s estimates. The Council also estimates coffee farmers collecting less of a harvest next year which would be the longest slump since the mid-’60’s.
Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, shared his insight regarding the current coffee futures situation by stating, “It appears as if the only way out of the coffee situation in Brazil is a miracle of much needed rain.”
The trend for coffee futures has resumed up since late last month. The initial margin requirement for coffee futures is $5,700 per contract so I must choose the trades wisely. I have coffee futures higher (in my work & studies) into the end of the week. With coffee futures up 940 points today, our target is about 700 points higher.
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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