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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:
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.
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.
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