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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:
Cattle Futures at Crossroads with Greener Pastures Signaling Beef Rebound
In America’s heartland, there are developments signaling a changing situation with US beef supplies as the grazing pastures turn greener. The recent rains may be attributed to turning the cattle futures markets into full retreat – but only time will tell.
Drought and cattle selloff at markets all around the nation have put the domestic-herd at a 63-year low, but pasture conditions are said to be mostly recovered from the 2012 originated drought that forced ranchers to sell-off their inventory of animals. Cattle futures are already showing signs of “topping” after reaching record highs highs just last month.
Laura Taylor, a senior commodities broker at RJO Futures in Chicago, shared her insight regarding the current cattle futures situation by stating, “…packer profit margins improved on the recent break and this might slow or stop the steep decline in cash prices see over the past several weeks.”
Although cattle futures trend is technically “up,” I am seeing the first signs of divergence at these levels. If feeder cattle futures continue downward and take out last week’s low (2.1107), I will have to reverse my thinking.
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: None this week.
DOWN Trending Futures Markets: Soybeans, Wheat, Cotton, Lean Hogs, Kansas Wheat, Sugar, Corn, British Pound, Crude Oil and Natural Gas, Euro-currency & Soy 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.
Gain for Year Paring as Commodities Fall to Six-Month Low
Effectively erasing most of this year’s gains, commodity futures markets (as a whole) have fallen to a six-month low with energy & grains declining on signs of ample supplies and a slow-down in China – the world leader in consuming energy and industrial metals.
According to the highly regarded Bloomberg Commodity Index, cotton, grains, and oilseeds have been the worst performing commodities this year. Brent crude oil is currently heading for a second monthly decline, which is the longest losing streak since May of last year.
Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, shared his insight regarding the current commodity futures situation by stating, “Most major commodity sectors (energies/grains) have continued to feel selling pressure due to robust supplies in the face of declining demand. Discounting unpredictable weather or world events, expect markets to continue to seek out demand inspired lows.”
Most of our agricultural commodity futures markets we trade are in established downtrends and we have been taking advantage of these down moves the best we can. The only commodity futures markets in uptrends now are: mini-gold and coffee. When these down-trending markets turn around, watch out!
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 at a Crossroads as US Raises Export Forecast Amid Harvest Upgrade
Wheat futures initially rallied in early morning trade once the USDA revised its outlook for domestic exports of wheat and global demand – effectively negating the increased production realization in yesterday’s report. Wheat futures have since reversed direction and are down for the trading session having made lower lows from yesterday.
The USDA said in its report yesterday the US is expected to export 25.5 M metric tons of wheat during the 2014-2015 fiscal year – revising its earlier estimate by 500,000 tons. The USDA’s estimate for domestic inventory was little changed even after raising its wheat harvest forecast.
Kevin Riordan, director of research at Capital Trading Group in Chicago, shared his insight regarding the current wheat futures situation by stating, “The expected increase in US wheat exports has offset the increase in production. This balance is keeping the ending stocks the same as they were last month.”
The trend for wheat futures remains down, but with a possible bottom – or bottoming action – taking place presently. Hard-red winter wheat futures are within .04c of their January low, and soft-red winter wheat futures appear to be putting in a strong base and “head-and-shoulders” formation.
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.
Record Domestic Crop Sends Soybean Futures Reeling
Soybean futures initially fell following today’s USDA Crop Production report, to the lowest soybean prices since 2010 once the report indicated supplies will be bigger than forecast here domestically. Soybean futures are mid-range (down .14c) as of this writing.
It is now estimated US farmers will harvest a record breaking 3.816B bushels of soybeans this year – 160,000 thousand more than estimated just last month, according to the USDA just this morning. This estimation was after completing the very first surveys of fields and farmers and very close to what other expert analyst’s were expecting.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, shared his insight regarding the current soybean futures situation by stating, “With ideal crop production weather across the country this season it comes as no surprise that this morning’s report was bearish on the market. The market will continue to watch how weather shapes up at the end of the season along with actual yield results.” Craney added, “For the time being look for the market to trade sideways into harvest.”
Soybean futures trend is still down with no bottom yet in sight. I do expect soybean futures to eventually rally soon, but seasonally speaking this market traditionally doesn’t put in a bottom until the end of the 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.
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: Copper & Feeder Cattle
DOWN Trending Futures Markets: Soybeans, Wheat, Cotton, Lean Hogs, Kansas Wheat, Sugar, Corn, British Pound and Crude Oil & Japanese Yen (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.
Wheat Futures Backtrack on Ukraine Outlook Not Disrupting Trade
Wheat futures have fallen after six-consecutive trading sessions higher – the longest rally in over three months – on the outlook that escalating tensions between the US & Russia regarding the Ukraine situation won’t interfere with the global grain trade. Wheat futures are down .05c per bushel from yesterday’s close as of this writing.
Following the Western countries sanctions on Russia because of the Ukrainian conflict, Russia has banned food imports from mostly North America, the European Union, Australia & Norway. Since the week ended July 31st, US wheat sales have decreased by 19% from the same time last year – according to the USDA.
Kevin Riordan, director of research at Capital Trading Group in Chicago, shared his insight regarding the current wheat futures situation by stating, “Unless there is renewed tensions in the Ukraine, demand for wheat (futures) is not expected to increase. If lower prices can’t cure lower demand then it’s hard to understand how higher prices would trigger higher demand.”
The trend for wheat futures is at a crossroads – technically “down” but a breakout above yesterday’s highs will change all that in my studies and work. Even if wheat futures do indeed trade higher, I see at least one more trade to the short side to test last week’s contract lows.
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.
With Dollar Gain, Sets-up Copper Futures Fall
(From Tuesday…Commentary to resume tomorrow.) Copper futures have retreated yet again today and are poised for their biggest drop in eight weeks as the strengthening US greenback may be waning the appeal of metals as an alternative investment. Copper futures are down $3.95 per pound as of this writing.
A highly recognized Industrial Metals Index has fallen three out of the last four business days after four consecutive monthly gains through last month on signs of improving domestic manufacturing demand. A spot dollar index, however, has reached a five-month high with domestic service industries expanding in July at reportedly their fastest pace since December 2005.
“With global markets nervous it might keep copper (futures) prices lower,” stated Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, sharing his insight regarding the current copper futures situation.
Copper futures trend is technically still up, but with clear signs of possibly “topping” at these levels. Two consecutive lows below the $317.20 level could change the trend to down – at a crossroads.
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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