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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:
Soybeans Futures Rising on Export Demand
Soybean futures worked its way to higher prices not seen in over two weeks on signs of increasing demand for US soybeans. Late in the trading session, however, soybean futures couldn’t hold its gains and appears as if it will close “down” for the day.
Today the USDA stated soybeans inspected for export rose 64% in the week ended last Thursday compared with a year earlier. Shipments of soybeans since last September have also climbed 22%, but soybean meal since last October has only risen almost 5% above last year’s pace.
“This morning’s rally in soybean (futures) gained support from the larger than expected soybean inspections. Supplies should remain tight a for some time since the expected 90 million bushels of U.S. soybean imports has yet to materialize,” said Kevin Riordan, director of research at Capital Trading Group in Chicago, regarding the current soybean futures situation.
The trend for soybean futures is technically “up,” however appears to be at some sort of crossroad. I will proceed with trades to the long side of soybean futures as long as the bullish scenario remains intact.
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: Wheat, Soybeans and Feeder Cattle & Soymeal (Both new this week.)
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.
US Jobless Claims Fall With Gold Futures
Gold futures reversed course after two big “up-days” earlier this week. It’s the biggest drop in gold prices in a week as waning jobless claims hint at a strengthening economy and a set-back for gold (futures) demand as a safe-haven for assets.
Gold bullion “hard-assets” through derivatives have reached their lowest point this week since 2009 with no help of the Federal Reserve cutting stimulus recently causing investors to lose faith in the intangible value of the precious metal. Gold futures plummeted 28% last year amid the backdrop of both a stronger economy and stock market.
“With the U.S. economy growing at an anemic pace and the Federal Reserve pulling back on stimulus, gold has lost some of its shine in the market place. Asset flows in the short-term appear to be going toward treasuries as investors wait for more details on the health of both the U.S. economy and global economy,” said Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, regarding the current gold futures situation.
Gold futures trend is down, albeit more “sideways” for the past couple of months. I am trying to get short gold futures at this time with the trend and seasonal tendency.
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 Extend Losses On Global Outlook
Wheat futures extended their losses from late last week as the consensus of sufficient global supplies gains momentum. Wheat futures are down .20c today extending the biggest slump in wheat prices in nearly five months.
The USDA estimates global wheat inventories to rise by one-half percent by June of next year (from last Friday’s USDA Crop Production report). USDA data also showed the premium that exporters paid for the soft-red winter wheat variety at terminals near New Orleans have been the lowest in almost eight months.
“The wheat market is due for a correction. The market rallied too high. When everyone runs for the exits you see massive liquidation,” said Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, regarding the current wheat futures situation. Moreno adds, “In my opinion, (wheat futures) are probably going to go even lower.”
The trend for wheat futures is still technically up (in my study), and I am still looking to take long positions. If wheat futures continue to trade at these lower levels through the end of the week, I may have to reverse my thinking and trading direction.
China Factory Slowdown Concern’s Copper Futures
Copper futures are taking a break after four up-closes on the outlook of China’s factory output slowdown and how it may affect demand there. China is the world’s biggest consumer of copper at this point in history.
China’s statistics bureau showed industrial production in April rose at a slower pace than the month earlier – trailing analysts forecasts. China reportedly accounts for more than 40% of the world’s copper demand alone.
“Today’s report showing industrial production slowing in China have put the bulls on their heels while sending copper (futures) lower,” said Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, regarding the current copper futures situation.
Copper futures trend remains up. With volatility and margin rates rather high at this time, I have to be selective with copper futures trades.
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, 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.
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