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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:
Corn Futures Finding Support Near Four-Year Lows
Corn futures appear to be stalling near four-year lows on the outlook of favorable weather here in the US. The US is the biggest corn exporter in the world, and it appears the global corn supply will be rising.
In the past 12 months, corn futures have fallen 24% (soybeans shed only 16%, and wheat dropped 19%) when it was realized the global inventory is rising. The USDA report almost two weeks ago that this will be the second year in a row corn has seen a “bumper crop” and global reserves rising to its highest in 14 years.
“Weather remains the focus in the corn market, and the weather is ideal for this time of year. We continue to see new lows in December Corn as the market prices in what is believed to be an outstanding crop,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, with his insight regarding the current corn futures situation.Craney added, “However, the September Corn contract is gaining a bit on the December contract as farmers sit on old crop corn.”
The trend for corn futures is down with now bottom in sight. We exited corn futures today, but am now looking for a temporary bounce in corn prices to get short again.
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.
Higher Beef Prices Forthcoming with Record Reaching Cattle Futures Feeder Cattle Futures | Livestock Futures
Cattle futures are signaling high beef prices to continue as the futures markets surge to new records. Feeder cattle is “limit-up” and live cattle futures are .37 cents from limit-up on the Chicago Mercantile Exchange as of this writing.
With the US domestic-herd shrinking to supplies not seen since the early 1950’s, the dwindling supplies have helped push beef prices to all-time highs. Bureau of Labor Statistics show ground-beef reaching a record $3.88 per pound last month and bone-less sirloin peaking out at nearly $7.69.
“Increasingly larger demand for beef at record (beef prices) has caught the market by surprise. While supplies are much tighter than expected it’s even more of a surprise to see (cattle futures) demand hold firm at the elevated prices levels,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, regarding the current cattle futures situation.
We are long feeder cattle futures from Friday with both a target price (218.62) and protective stop in place. Another limit-up day tomorrow and we could very easily realize our feeder cattle futures target.
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 Silver
DOWN Trending Futures Markets: Euro-currency, Soybeans, Wheat, Cotton, Lean Hogs, Kansas Wheat, Natural Gas, Sugar, Corn, Soybean Oil, Soymeal & Coffee (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 Advance with Escalating Ukrainian Turmoil
Wheat futures spiked higher today when it was learned a civilian airliner was shot down in Ukraine near the Russian boarder. The countries of Russia & Ukraine are considerable supplier of world wheat and any disruption from those country’s will affect wheat futures.
Wheat futures have had a topsy-turvy ride this year….wheat prices spiked 15% in the first quarter alone as tensions between Russia & Ukraine escalated creating supply concerns. Then in the second quarter wheat futures tumbled 17% when tensions eased and drought conditions here in the US receded.
Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, had this to say regarding the current wheat futures situation, “Ukraine produces a lot of wheat . When this crisis occurred someone bought 7,700 contracts of Chicago Wheat at the market.” Moreno added, “Ukraine is the 6th largest wheat exporter in the world. We need to keep an eye on this situation.”
Wheat futures’ trend remains down despite this temporary spike in wheat prices. I will look for an opportunity to sell short when wheat futures finds resistance.
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.
Low-Prices Seen Propping-Up Demand for Soybean Futures
Soybean futures have rallied above prices from before Friday’s USDA Crop Production report on signs of demand after grain and oilseed prices fell to their lowest levels since 2010 recently. Soybean futures have rallied as much as .21c per bushel today, well above Friday’s highs.
Just today, the USDA reported soybean sales of 120,000 metric tons to China alone, and twice that amount to destinations not yet determined. The expectation of a bumper soybean crop this year has contributed to soybean futures losing 15% in this past year.
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, had this to say regarding the current soybean futures situation, “With grain prices falling to 2010 levels the commercial buyers have stepped in which should give a level of support to the market.”
The trend for soybean futures is down with no bottom yet in sight. I have been patient (maybe “too patient”) for a bounce in soybean futures to get onboard the short side and today’s action appears the market is setting-up for just that.
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 & Soybean Futures Drop on Crop Conditions
Soybean futures remain near their lowest recent prices and corn futures are at a four-year low after Friday’s USDA Crop Production report illustrated these crops in the best condition since 1994. The US leads the world in both corn and soybean production.
As of Sunday, the USDA rated 76% of our domestic corn crop, and 72% of the soybean crop “in top condition” and “the best shape” for this time of year in the past 20 years. It has also been made known US farmers have just finished planting just under an estimated 85M acres of soybeans – the biggest amount ever.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, had this to say regarding the current corn & soybean futures situation, “Pressure continued on the corn and soybean futures. Higher than expected acreage figures at the end of June, last week’s crop production figures and Monday’s crop progress report, all pointed to huge crops this year in both markets.” Levy added, “A favorable weather outlook is also adding fuel to the continued move lower.”
Soybean futures trend remains down with no bottom in sight. I think soybean futures have found support here (if Friday’s low can hold), and I am looking for a bounce in this market soon.
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 Gold, Silver & Copper (These three new this week.)
DOWN Trending Futures Markets: Euro-currency, Soybeans, Wheat and Cotton, Lean Hogs, Kansas Wheat, Natural Gas, Sugar, Corn, Soybean Oil & Soymeal (These last eight new this week.)
Never before in my experience do I recall as many “set-up” markets as there are now.
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.
Equities, Portugal’s Debt Seen Boosting Gold Futures
Gold futures climbed to prices not seen since March as concerns over debt in Portugal and the current slump in equities possibly boosting demand for the precious metal as a safe haven. Gold futures are up over $14.00 per ounce from yesterday as of this writing.
There are major concerns that Europe’s most indebted nations remain financially vulnerable to shocks after Euro-bonds declined when Portugal’s largest bank missed a debt payment recently. Equity-markets have been in the tank since last week at this time and this is also contributing to flight-to-safety in gold futures.
Laura Taylor, a senior commodities broker at RJO Futures in Chicago, had this to say regarding the current gold futures situation, “The flight to quality today in the gold (futures) and bonds stems from the concerns in Europe over the Portugal’s possible financial collapse.” Taylor adds, “But what is adding fuel to the fire is the world’s concerns that the Federal Reserve’s intention to stop pumping money into the economy will actually take place come October.”
The trend in gold futures is up with higher-highs being made just today. We are long gold futures since yesterday with target prices and protective stops in place.
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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