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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:
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.
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.
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