The Official Brian Schad Commodity Futures
& Options Trading Corporation Website
Commitment to Trading Excellence
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 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.
Rebounding Economy Crimps Haven Demand for Gold Futures
Gold futures are finding waning demand for the precious metal as an alternative investment since the government released data showing US economic growth rebounding more than forecasted for the last quarter. Gold futures are in its third day lower.
The government released its “gross domestic product” (GDP) report today which conveyed it rising at a 4% annualized rate which compares well with the revised 2.1% “drop” in the first quarter. Other economists had the GDP forecasted to be 3%, so this is a 25% difference.
“The GDP figures released early Wednesday morning, showed a higher than expected rise, boosting the dollar and equity markets, and pressuring the gold futures. The market still awaits any announcement from the Fed later Wednesday and the unemployment report on Friday,” stated Barb Levy, chief director for The Fox Group’s futures division in Chicago, sharing her insight regarding the current gold futures situation.
Gold futures trend is technically still UP, albeit barely hanging on and at a crossroads. I am still attempting to look for buying opportunities in gold futures until a more clearer picture develops.
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, I update my 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 my 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, I monitor them on a weekly basis. Although the futures markets themselves will ultimately provide the most accurate illustration of trend, these (weekly) charts that I have identified, serve to forewarn us of the next possible bigger move.
Here are the commodity markets which illustrate the bigger picture changing for them:
UP Trending Futures Markets: Crude Oil, Feeder Cattle and NASDAQ Index & British Pound
DOWN Trending Futures Markets: Soybeans & Wheat (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.
Bear Market Extended With Cotton Futures
Cotton futures have extended its losses today as demand wanes with an improving outlook for domestic crops. The US is the world’s biggest exporter of cotton and the cotton futures market is reacting accordingly with added signs of supply plentifulness.
The USDA reported today US cotton export sales in the week ending June 19th for the upcoming ending season next month fell 98% from the week earlier. Plus, adequate rains these past two months have helped ease drought conditions in the top cotton growing state of Texas. With these two scenarios, the USDA estimates domestic cotton output to rise 16% over the past year with increased plantings.
“Things are shaping up for another huge US cotton crop, and China is sitting on a massive stockpile, so we could see prices continue to be under pressure,” said Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, regarding the current cotton futures situation.
We had been short cotton futures with the overall trend, but I believe we may have been prematurely stopped out upon today’s opening bell. I will look for another entry into the short side of cotton futures for tomorrow’s 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.
Soybean Futures Halt Slide on Two Concerns
Soybean futures halted their current slide on the outlook of excessive rains possibly reducing acreage as domestic inventories decline. The US is the world’s leading grower of soybeans and soybean futures the most volatile grain hosted on the Chicago Board of Trade.
A Mid-Western grain advisor wrote today that “damage from flooding and hail may cut planted area of soybeans (and corn) by two million acres. Plus – according to more than two dozen industry analysts – domestic reserves (of the oilseed) at the beginning of this month are said to be the smallest since 1977.
“Soybeans futures fell early in the week on reports late Monday of favorable ratings for the crop and slack demand. The slide in the market tapered off today to finish the session higher as the market found technical support near the $12.20 level and fundamental support from worry over damaging weather conditions,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, regarding the current soybean futures situation.
The trend for soybean futures is down and I view this current spike in prices as an expected pullback. I am short this market and expect further downside pressure on soybean futures until Monday’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.
Fields Showing in Good Shape Slump Grain Futures
Grain futures continue to being set-back across the board early this week as reports of agricultural crops being in good shape across the nation come in. Soybean futures are headed for their largest loss in four weeks, corn futures finding their biggest drop since mid-May, and wheat futures have seen their lowest prices for front-month futures contract since early February.
The USDA reported just yesterday 72% of our domestic soybean crops were rated good to excellent. 74% rated in top-condition for the corn crop, but both corn futures and soybean futures are headed for their second monthly drop in futures prices.
“Crop conditions dropped in the good to excellent range last week, but they still remain higher than the same time last year. Even though too much rain can be harmful, investors still believe “rain makes grain” no matter what,” said Laura Taylor, a senior commodities broker at RJO Futures in Chicago, regarding the current grain futures situation.
All grain futures are in newly emerged down-trends at this time with wheat futures being the weakest. I am currently short soybean futures, soymeal futures, and corn futures and am looking to get short wheat futures in tomorrow’s trading session.
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.
Recent Comments