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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: Crude Oil, Feeder Cattle and NASDAQ Index & British Pound (Both new this week.)
DOWN Trending Futures Markets: Gold, Euro-currency & Soybeans (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 Higher as Rainfall Threatens Domestic Harvest
Wheat futures have rallied for two days in a row on the outlook rain in the central Great Plains area of Oklahoma to Kansas may “delay harvesting” and ultimately crop quality to lessen. The United States is the world’s biggest exporter of wheat and wheat futures is up only slightly in late session trading.
Rain in the forecast is said to be between one-half and two inches, but some areas are expecting as much as four inches! Wheat harvest delays are expected to be worst in Oklahoma and Southern Kansas – Kansas being the largest grower of winter wheat in the nation.
“The summer of 2014 appears to be proving the idea that timing is everything when it comes to weather patterns and the grain markets. A mere three weeks ago the rains that are currently falling in the wheat belt would be welcomed by the markets,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, regarding the current wheat futures situation. Riordanadded, “At this late stage in development, however, the rain may very well delay harvest which could ultimately deteriorate the quality of the crop.”
Wheat futures trend is still clearly down with more possible seasonal decline ahead. Wheat futures are unable to hold the recent gains so I view this as an opportunity to short 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.
Fed Meeting Helps Consolidate Gold Futures
Gold futures are virtually at a standstill ahead of today’s conclusion of a two-day Federal Open Market Committee meeting which is intended more for monetary and interest-rate policy (than gold itself). Gold futures price swings are said to have slumped to their lowest since October 2010.
So far this month, gold futures have traded in a range of $45 per ounce compared with the $74 per ounce range just last month. According to data compelled by industry experts, this precious metal’s 60-day historical volatility has dropped to 11.4 – the lowest since mid-October 2010.
“Gold (futures) is trading in a more defensive position as the equity market continues to trade within a tight trading range. Economic data, deflation and geopolitical risks do not pose immediate threats that would drive gold prices higher in the short-term,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, regarding the current gold futures situation.Craney added, “The bulls in the gold market need some surprise from any of these catalysts to favor higher prices.”
The trend for gold futures is technically down with a seasonal tendency to continue lower until the end of the month. I am currently short gold futures coming into today’s two-day meeting conclusion of the Fed, and have a rather tight stop above the 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.
Cattle Futures at Record Highs, No Top Yet in Sight
Feeder cattle futures reached record highs yesterday at just over $2.10 per pound. Domestic ground beef prices are said to be up 76% in the past five years following a seven year decline in the US herd has left the fewest cattle since 1951 – USDA data shows.
There is speculation it may take at least three years to expand the herd to get supply in front of demand while the USDA claims the US will become a “net beef importer” in 2015. Expanding beef output will be no easy feat with the gestation period for calves being nine months and full grown animals taking as long as 22-months before reaching slaughter weight.
“Short-term cash fundamentals look strong. The trend is still up. We watch this (cattle futures) market in awe,” said Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, regarding the current cattle futures situation.
Cattle futures up-trend shows no sign of relenting. I am patiently awaiting some type of pullback in feeder cattle futures prices to feel more confident about taking a position.
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 Weekly 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, Soybeans, Feeder Cattle & Natural Gas (New this week.)
DOWN Trending Futures Markets: Gold and Euro-currency & Corn (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.
U.S. Harvest Outlook in Reconsideration for Wheat Futures
Wheat futures found early support in today’s trading session following yesterday’s plummet following the USDA Crop Production report. The reason for the abrupt halt to the initial wheat futures slide is the fact that there are prospects for declining domestic production versus rising world supply.
The USDA reported yesterday US wheat output may be down slightly more than previously reported last month, but the bigger issue is domestic output is now estimated to be 8.8% less than this time last year.
“The USDA shocked the market by lowering US wheat production estimates. Conditions in other producing regions are expected to more than offsetting lower expectations from the US,” said Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, regarding the current wheat futures situation.
The trend for wheat futures is now clearly down. I expect a pull-back higher in wheat futures prices soon and will await a lower-risk opportunity to short 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.
Corn Futures Extend Lows As Stockpiles Seen Higher Than Expected
Corn futures are finding their way lower after the USDA Crop Production report released earlier this morning confirmed what analysts were predicting. Corn inventories before 2015’s harvest will be higher than predicted and will surpass the 2013 bumper crop.
Corn is the biggest domestic crop and the 2013 value was just over $62.5B dollars. Corn futures had gained more than 5% earlier this year when US exports surged and record livestock prices boosted demand for corn as animal feed.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, had this to say regarding the current corn futures situation, “Today’s USDA crop report confirmed the recent fall in corn, as current U.S. stockpiles of the grain and projections for this year’s harvest came in at high levels. Adding to the pressure on the market is the forecast for further mild and wet growing conditions, as well as this week’s crop progress report which showed the current crop ratings at good to excellent for three quarters of the planted corn.”
Corn futures trend is down with no bottom yet in sight. Next support level for corn futures appears to be .20c lower. I will require a pull-back in prices before initiating a short position.
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.
Global Supply Outlook Sends Wheat Futures to Three-Month Low
Speculators have pushed wheat futures to more than three-month lows on the outlook tomorrow’s USDA Crop Production report will suggest world wheat supply outpacing demand. Wheat futures are currently trading .11c lower than yesterday’s close, current at $6.01 per bushel.
Analysts are saying last month the USDA predicted less wheat stockpiles than there actually will be. They are stating global wheat inventory may rise to the highest amount in three years with help of a stronger US dollar.
Laura Taylor, a senior commodities broker at RJO Futures in Chicago, had this to say regarding the current wheat futures situation,“Wheat stocks for 2013/2014 in tomorrow’s USDA report are pegged at 588 million bushels compared to 583 million in May. The 2014/2015 stocks average estimate is up 10 million bushels from May’s estimate of 540 million.” Taylor added, “All more bearish for wheat prices.”
The trend for wheat futures is down with no bottom yet in sight. With wheat futures extending their lows today before the report, I will look for some type of temporary rally to get short 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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