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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:
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.
Corn Futures Below $4 First Time Since 2010
Corn futures have dropped below $4.00 per bushel for the first time since this time in 2010. The US is the world’s biggest grower of corn and the prevailing outlook for corn futures is that there will be plenty enough rain to boost yields for this year’s harvest.
Forecasts for preferred weather in the US corn-belt over the next week will favor the crops. Global stockpiles of corn are expected to rise to the highest since 2000 before the Northern Hemisphere’s 2015 harvest.
Kevin Riordan, director of research at Capital Trading Group in Chicago, had this to say regarding the current corn futures situation, “The bears continue to be in control of the Corn market and it’s hard to see an end to their dominance.” Riordan adds, “The weather looks ideal and in the next few weeks It’s likely that we’ll pollinate two-thirds of the crop.”
Corn futures are down with no bottom yet in sight. Corn futures started this leg down a week-and-a-half ago following the end-of-month USDA Crop Progress report – a report that I traditionally stand aside from. I am “speculating” we will see a bounce following Friday’s report.
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.
Harvest Prospects Extend Soybean Futures Losses
Soybean futures have traded lower for a week and a half now – just before late last month’s USDA crop progress report. The prevailing outlook is our domestic crops remain in good condition which is boosting the sentiments of a record harvest.
USDA data shows the US soybean crop in the best shape for this time of the year in the past 20 years, with 72% of soybeans in good to excellent condition as of Sunday. The USDA is scheduled to officially update their supply versus demand forecasts on Friday, July 11th.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, had this to say regarding the current soybean futures situation, “Weather remains the key factor for grain prices in the short-term. Conditions have been quite favorable across much of the Midwest this growing season, and that is currently being reflected in the soybean (futures) market.” Craney added, “As long as weather remains favorable the downward trend in (soybean futures) should continue in the short-term.”
The trend for soybean futures is down with no bottom yet in sight. I will need a significant bounce in soybean futures prices before considering a short position, especially with this next report coming out Friday.
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 Lower on Global Glut of Sweetener
Sugar futures may be losing it’s sweetness. Brazil, the world’s top producer of sugar, is realizing investments in sugar-cane are being cut amid a “global glut” of the sweet stuff.
The top producer of sugar in Brazil shares a joint venture with Royal Dutch Shell and they realize along with much supply of sugar plentiful, that Brazilian government policies actually hold down the price of ethanol. The actual returns on capital from the ethanol & sugar collaberation have dwindled to less than 10%.
“In my opinion, the short term picture for sugar futures looks bearish. The Commitment of Traders (data) is still showing overbought conditions still in place. Look for sugar (futures) to move lower,” said Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, regarding the current sugar futures situation.
The technical trend for sugar futures has been down (albeit choppy) since March. Only last week did my work show a possible change in trend for sugar futures to “up,” but with absolutely no follow-up. I am proceeding with caution with this market…
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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