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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 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: Soymeal, Soybeans and Feeder Cattle & Crude Oil (Both new this week.)
DOWN Trending Futures Markets: Cotton and Gold (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.
Orange Juice Futures Feel Wrath of Bugs, Crop at 29-Year Low
Orange juice supplies are being threatened for a second time this year with weather this time, after a disease-spreading bug already wreaked havoc on Florida citrus crops earlier this year. A Florida orange juice producer says it could mean “pure hell” for supplies.
Florida is the world’s second-biggest grower of oranges, but that state has taken a toll on its citrus after a disease made that state’s crop the smallest in 29 years earlier this year – so now they brace for six hurricanes forecasted through November. Orange juice futures are already up 34% since October and are expected to climb another 23% to just over $2.00 per pound.
Kevin Riordan, director of research at Capital Trading Group in Chicago, had this to say regarding the current orange juice futures situation, “The Florida OJ crop may be heading into a perfect storm of negative news this summer. Already struggling with a smaller harvest due to a citrus greening disease, now the OJ crop may have to deal with as many as six hurricanes projected in the Florida area from now until November.”
The trend for orange juice futures remains up since October, but must cross the $1.68 threshold to keep the up-trend intact. Orange juice futures is not a market I currently trade, but am now researching the trend continuity for “future” use (possibly).
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.
Lower Crop Estimates in Brazil Mean Lower Coffee Futures
Coffee futures appear to be in an all out down trend since the middle of last month thanks to a change in weather where it was needed most. Coffee futures respond most to Brazil’s status as the world’s top exporter & producer and recently they have experienced enough rains to ease drought damage for their coffee plants.
Brazil’s Agriculture Minister has gone on record as recently saying last month’s rains have reduced the impact of the worst dry-spell in 50 years for coffee growers – less severe coffee crop damage than estimated. He went on to say that farmers may realize a “bumper” coffee crop next year.
Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, had this to say regarding the current coffee futures situation,“With supply concerns dissipating due to recent rains the trend in the coffee (futures) market is bearish. So long as these supply concerns are kept in check, then this market will continue its downward trajectory.”
Coffee futures trend is down with the market extending their lows in the past two trading sessions. I have to be especially selective which coffee trades we take due to an initial margin requirement of over $8,000 per contract in order to maintain a 25%-30% margin to equity ratio standard.
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 Lower With Expanding Plantings
Soybean futures retreated today after such a large “up” day yesterday once forecasters reported the possibility of soybean production climbing to a record next season. Farmers, especially in the Northern Hemisphere, are expanding soybean planting and soybean futures are predictably responding.
The Hamberg, Germany based research group claims world soybean production will be just over 6% higher than the prior marketing year. They also stated the total worldwide soybean harvested area can reach an all-time high 4% more than one year ago.
Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, had this to say regarding the current soybean futures situation, “The soybean (futures) markets are separated into old crop and new crop. The tight supplies of old crop soybeans due to aggressive exports providing support while index funds rolling out of the July contracts is providing some resistance.” Moreno adds, “With the improving weather we are seeing and soybean planting at 78% complete (they were expecting 75%) look for beans to move lower.”
The technical trend for soybean futures remains up, but I stopped myself out of the long position earlier this morning because of the abrupt reversal. I am still bullish soybean futures until a more clear picture of this market unfolds.
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: Soybeans, Soymeal and Japanese-Yen & 10yr. T-Notes (Both new this week.)
DOWN Trending Futures Markets: Cotton & Euro-currency (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.
Demand Concern Outlook Sinks Copper Futures
After reaching 11-week highs, copper futures retreated on the outlook of waning economic growth in both China & the US – the world’s biggest consumers of the metal. For the year, copper futures is down 6.4% amid the reality of slowing economies.
Our government figures showed today US GDP falling at an annualized rate of 1% in the first quarter – more than some economists estimated. In the next week, a purchasing managers index is expected to slower growth than previously estimated in China.
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, had this to say regarding the current copper futures situation, “China has been a real driver in commodity prices and even the hint of a slowdown in manufacturing, like we saw in April’s PMI, could put some pressure on copper (futures) going forward.” Brady added, “Tepid growth in the US would do little to offset any real demand destruction from China.”
Copper futures trend is clearly “up” and pulling-back in what looks like a normal correction. I am looking for a lower-risk way into the copper futures market on this current dip.
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 May Find Support with El Nino
Wheat futures may be finding much needed support as the tropical storm phenomena “El Nino” is looming for Australia’s wheat fields. The country “down under” is standing-by for a drier winter in the wheat growing regions in the east & south.
Australia’s national meteorology center predicts a 60% chance of “below-average” rainfall between June & August – their winter months – where they need it most for their wheat crops. The USDA ranks Australia as the world’s fourth-biggest wheat exporter, but is set to take a back-seat to Russia as they boost their shipments of wheat.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, had this to say regarding the current wheat futures situation, “Wheat futures saw recent drawdowns as rainfall has boosted crop forecasts across Russia and the southern U.S., however this may not be the case with the crop forecasts coming out of Australia. The Australian growing regions may experience lower rainfall due to a possible El Nino effect.” Levy added, “Concern over the El Nino possibility may begin to lend support to the wheat futures prices.”
The trend for wheat futures is down with no bottom yet in sight. We were just stopped out of our wheat futures “short” position today and am looking to reset short again 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.
Ukraine Outlook Sends Gold Futures Lower
Gold futures has plummeted today further minimizing the precious metal’s appeal as a “safe-haven” for investors. A combination of events is reportedly responsible for the two-week low in gold futures.
First, the Ukraine’s president-elect, whom is said to be pro-Russian, has eased tensions with his victory so it is perceived to be unnecessary for the EU and the US to impose tougher restrictions against Russia. Earlier this year, gold futures gained almost 7% because of the uncertainty creating this demand. Finally, the strength of the US Dollar by the monetary policy maker’s outlook of non-inflation has also helped to dampen any “gold rush.”
Kevin Riordan, director of research at Capital Trading Group in Chicago, had this to say regarding the current gold futures situation,“The current sell off in gold (futures) prices has been fueled not only by easing tensions in the Ukraine, but also in the strengthening of the US Dollar.”
Gold futures trend remains down with no bottom yet in sight. With gold futures making lower lows today, the next support level (in my studies) is right near where my target price is working.
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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