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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:
Sugar Futures Rally on Brazil Sugar Output Seen Cut by Drought
After South American sugar crops were damaged by drought, it appears the sugar output in the world’s largest producing region in Brazil will decline just over 5% this season. Sugar futures have rallied over two-thirds of one-cent since Monday morning.
According to a prominent meteorologist down there, the area that produces the most sugar and ethanol was hit with the driest & hottest summer in seven decades. Sugar mills are expected two lose almost two million metric tons of sugar production because of this.
Barb Levy, chief director for The Fox Group’s futures division in Chicago, had this to say regarding the current sugar futures situation, “Sugar futures are slated to rise due to drought conditions in Brazil. Sao Paulo is experiencing the worst drought in decades. Sugar mills are already seeing a 5.2% decline from last season, in the amount of sugar processed.” Levy added, “The hope is that larger harvesting area will offset most of the drought difficulties.”
The technical trend for sugar is actually down right now, despite this current rally happening. With a clearer picture for sugar futures unfolding, if the rallying continues we could see a resumption of the overall uptrend on the weekly charts.
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.
Forecast of EU Imports to Rise is Bullish for Soybean Futures
A prominent soybean industry researcher predicts European Union imports will climb to levels not seen since the 2008 time frame. Industry group “Oil World” makes this prediction based upon the increased crushing of the oil seed for the soy bi-products.
The EU is on track to import almost 14M metric tons of soybeans through August – a little more than one-half ton imported a year earlier. Oil World sees the crossings rise by a little more than one-quarter ton in this time frame.
Oil World went on to say that earlier this year there had been lower than expected soybean meal imports from South America. At the same time, the “reserved selling of rapeseed there in Europe kept prices of the competing oilseed high.”
Soybean futures trend is up with no top yet in sight. We were stopped out just yesterday one day after soybean futures made new contract highs late last week. Looking for another opportunity to get long 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 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, Coffee, Corn, Soymeal and Cotton, Natural Gas, British Pound & CBT Wheat (These four 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.
Wheat Futures Rebound on Supply Disruption Outlook
Yesterday’s abrupt “about-face” in wheat futures has been halted as the wheat market finds support today and re-tests the highs. Wheat futures are up over .07 cents (as of this writing) in Chicago.
One of the two potential problems we’re facing with the wheat market is the political turmoil and possible sanctions imposed on Ukraine – the world’s sixth-largest exporter of wheat. The other potential problem is with our domestic winter wheat conditions as drought lingers in some parts of our Great Plains growing regions.
“The rebound in wheat (futures) prices has been attributed to two unrelated events,” stated Kevin Riordan, director of research at Capital Trading Group in Chicago, regarding the current wheat futures situation.
The technical trend in wheat futures has rolled over to down in the past week, or so. We have profited on the long side of CBT Wheat futures this week, but am on the sidelines for a clearer picture to develop…
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.
Rain in Brazil May Aid Crops, but Sinks Coffee Futures
Coffee futures have plummeted nearly 6% from last week’s highs since a recent forecast of rain in Brazil’s coffee growing region boosts the prospects for their crops. Coffee futures’ move lower is the biggest drop in prices in more than three weeks during a time when the world’s biggest grower and exporter of coffee beans has been coping with the worst drought in decades.
The drought in Brazil during January and February definitively reduced coffee crop prospects, which caused coffee prices to soar 76% so far this year. In the next week to a week-and-a-half, however, above normal rainfall is expected in the coffee growing areas that need it most.
“The prospects of wet weather are driving coffee prices down and increasing volatility. Any rain is welcome as concerns over Brazil’s coffee crop following the worst drought in decades continue to dominate the market,” stated Matt Zeman, a senior commodity broker at Kingsview in Chicago, regarding the current coffee futures situation.
Coffee futures trend has flip-flopped down from up, and is currently up. The initial margin requirement for coffee futures is just over $8,000 bucks per contract so in order for me to initiate a position I will await a contraction in volatility on a pull-back in prices.
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.
Gold Futures Tank on Stimulus Concerns
Gold futures plummeted today with its biggest drop of the year on the outlook of domestic consumer prices strengthening may give the Federal Reserve the okay to scale back their stimulus efforts even more. Gold futures are currently down $25 per ounce as of this writing, but were down over $40 per ounce with the session low of $1,284.40 per ounce.
The CPI (“consumer price index”) rose two-tenths of 1% on the government report this morning, and that was double what many economists were predicting. Even US retail sales recently showed a pick-up in activity last month more than economists had forecasted.
“Gold (futures) seems to be catching up with a strengthening economy and how the feds are reacting to it,” stated Laura Taylor, a senior commodities broker at RJO Futures in Chicago, regarding the current gold futures situation.
The trend for gold futures is technically still down, but up until this morning had been at a crossroads and the verge of switching trends. This gold futures fallout today verifies the downward trend.
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: Soymeal, Corn and Crude Oil & Coffee (Both new this week.)
DOWN Trending Futures Markets: Russell 2000 Index (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.
Gains Seen Overdone Stalls Soybean Futures
Soybean futures have much information to digest, one day after the USDA report confirmed smaller domestic stockpiles than previously expected. As soybean farmers now prepare to boost plantings, the outlook now is that the recent price gains may have been overdone.
Before the next harvest, US soybean inventories are expected to total 135M bushels – which is almost 7% less than forecasted just last month and within estimate forecasts. The outlook of lesser supplies have helped soybean futures soar 15% so far this year.
“With confirmation of Chinese canceling at least 500,000 metric tons (10 to 12 cargoes) we might see a significant move lower in (soybean futures). If we hear of more cancellations of US and Brazilian beans into China, and massive overbought technical levels, a correction could be looming,” stated Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, regarding the current soybean futures situation.
Soybean futures trend is up with no top yet in sight. I am looking for a further pull-back in soybean futures prices before reinitiating long positions with the trend.
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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