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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’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: Coffee, British Pound, Wheat, Kansas Wheat, & Soybeans
DOWN Trending Futures Markets: (None 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.
Sugar Futures Grind Lower as Exports From India Slowing
Sugar futures continue to pull-back as shipments of sugar from India – the world’s second-biggest producer of sugar – have slowed after sugar prices reached a 15-month high earlier this year. The largest sugar refiner in India said they are considering “export incentives” in an effort to promote their product, but so far no decision made.
To give you an idea of the sugar export slowdown, India’s exports may total nearly 300,000 tons in the six-month period into September, and when you compare this with the 1.5M tons exported in the six-month period prior, you can clearly see the concern. The slow exports may be supporting sugar prices temporarily, but there are forecasts for a global sugar deficit because of the adverse weather in Australia & Brazil.
“The recent drop in sugar futures has begun to taper off as the supply situation remains in question. India’s sugar output for 2014-15 is expected to rise 3 percent but a growing domestic consumption expectation will result in tighter supplies,” said Barb Levy, chief director for The Fox Group’s futures division in Chicago, regarding the current sugar futures situation. Levy added, “Additionally sugar production out of Brazil shows a large amount of near term supplies but there is much concern over smaller harvest figures for the sugar still in the fields.”
The technical trend for sugar futures remains down. There seems to be volatility on the sugar futures charts down here at these levels that keeps me out of 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.
Indonesia Coffee Demand Seen Climbing to Record
Coffee futures will have to contend with Indonesia’s growing consumption & demand in the next two years. Coffee industry experts there expect consumption to spike by a record one-third as income and population increases on the island nation.
The chairman of the Association of Indonesian Coffee Exporters & Industries claims coffee demand will probably rise to 400,000 metric tons in 2016, from what is predicted to be 300,000 this year, and what was 260,000 last year. Indonesia is the third-biggest grower of the robusta coffee variety, and rising domestic demand there may reduce supplies of their own use – where robusta is said to account for 80% of the use.
Kevin Riordan, director of research at Capital Trading Group in Chicago, had this to say regarding the current coffee futures situation, “Demand for coffee in Indonesia is likely to increase due to a rising population and quality of life increase as well. An improvement to the quality of coffee itself will also improve demand.”
The trend for coffee futures remains up, however with a top (temporary) possibly in sight. I am having challenges trading coffee futures at the moment because initial margin for this market is just over $8,000 per contract. Having a position in this market, plus gold at the same time (along with other markets), is asking for too high a margin vs. equity scenario.
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 Slip as Weather Outlook Favors Planting
Soybean futures continue their free fall from $15.20 highs (only last week) on the outlook the USDA will report favorable production and inventory later this week. Soybean futures are currently trading at $14.48 per bushel at the Chicago Board of Trade – this .70 cent drop the most in over a month.
On Friday, the USDA will release its forecasts for world grain supply and demand, but in the meantime, here is what a survey of industry analysts are predicting: for world soybean stockpiles to rise to a record 79.68M metric tons before the start of the Northern Hemisphere’s growing 2015 season. Another report reveals US soybean output projected at all-time highs this year.
Matt Zeman, a senior commodity broker at Kingsview in Chicago, had this to say regarding the current soybean futures situation,“Speculators appear to be selling beans and/or taking profits as the upcoming USDA report may indicate a more favorable supply scenario for next year.”
Soybean futures trend remains up, however, may be at a crossroads. I am still looking for buying opportunities in soybean futures, but any much more trading at these levels, and lower could change my mind about the long side of 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’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: Coffee, British Pound, Soymeal, Wheat and Feeder Cattle, Kansas Wheat, S&P 500 Index & Soybeans
DOWN Trending Futures Markets: (None 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.
Supply Outlook Counters US Weather; Wheat Futures
Wheat futures continue to extend their gains on the outlook of improved growing conditions from Europe to Australia won’t be enough to compensate for deteriorating crops in the US. The United States continues to be the world’s biggest exporter of wheat.
Wheat futures have gained 18% this year despite the USDA’s estimate for the Northern Hemisphere harvest to rise by 5.7% this year – the first increase in four years. Other analysts feel rising supplies in most wheat exporting nations, and reduced shipping delays in Canada after their bumper crop, may be enough to cap the current rally.
Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, had this to say regarding the current wheat futures situation, “Although wheat (futures) have been strong last few months we might see a break lower if the weather didn’t damage the crop as much as we feared. We might see a break soon in the wheat (futures) because we might be overdone to the upside.”
The trend for wheat futures has technically rolled into an up-trend with today’s action. I am leery of being long wheat futures this time of year, and may consider trading both sides of 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 Climb to Recent Highs as Planting Lags
Corn futures are making a run to recent highs and up for a third-day in a row. This run-up in prices is set to be the biggest monthly corn futures gain in prices since 2010 after the USDA said current corn plantings are trailing the five-year average.
The USDA claims about 19% of our domestic corn crop was planted (as of April 27) compared to only 6% a week earlier. The current five-year average should put plantings closer to 28%, but this lag behind the average is a reason why a “risk premium” has been built into current corn prices (since March).
Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, had this to say regarding the current corn futures situation, “We are still below the 5-year average and with more rain on the way we could see plantings continue to lag. If poor weather continues to further delay corn plantings we could see farmers switching from some unplanted corn acres to soybean.”
Corn futures trend is up with no top yet in sight. If corn futures can manage to close with two consecutive higher closes above 524^2 (the April 9th high), I think we could be off to the races.
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’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, Cotton, Coffee, Natural Gas, British Pound, Corn, Soymeal & Wheat
DOWN Trending Futures Markets: (None 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.
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