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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 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.
Corn Futures Initially Rally on Inventory Estimate Cut
Just this morning corn futures spiked to highs not seen since last summer. The USDA reported earlier today a lower than expected 2014 corn inventory of what many analysts were predicting as domestic exports have improved.
Analysts surveyed from Bloomberg News expected a bit more than 1.4B bushels of corn in reserves, while the USDA reported last month an expectation of 1.456B bushels. As of today, corn reserves are expected to be 1.331B bushels as of August 1st.
“The USDA confirmed what many on the street were anticipating, as inventories of corn were trimmed. Today’s report of strong global demand is seen as validation for the recent surge in corn (futures) prices,” stated Devin Brady, President of Progressive Trading Group in Sherman Oaks, CA, regarding the current corn futures situation.
Corn futures trend is clearly up, and had been trading higher going into today’s report. I exited our long position and am looking for a pull-back in corn futures before initiating another long trade (preferably).
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.
Government Subsides Boost China’s Cotton Futures
Certain cotton farmers in China are being subsidized by their government by a higher than expected amount. Cotton futures there have reportedly soared the most in seven months as the world’s largest consumer of cotton resets the reference price for that crop.
Cotton futures on the Zhengzhou Commodity Exchange rose as much as 3.6% – the biggest gain for cotton since last summer. With the government setting the reference price to 19.8K yuan per ton, and the current price for cotton futures 16.1K per ton, I would say cotton futures has more to rise there.
“Expectations are for a bullish USDA report for cotton this week. Nothing major has changed fundamentally in the cotton (futures) market. Texas did see some rainfall overnight, although reports are that it didn’t amount to much,” stated Kevin Craney, Director of Managed Futures at RJO Futures in Chicago, regarding the current cotton futures situation. Craney added,“Therefore, this will continue to support the (cotton futures) market as we go into the report this week.”
The trend for cotton futures remains up, despite its inability to hold the late March gains. I am long cotton futures but feel it may be at a crossroads.
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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