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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:
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.
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: Cotton, Lean Hogs, Kansas Wheat, Soymeal, CBT Wheat and Corn & S&P 500 Index (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.
Wheat Futures Extend Biggest Drop on Favorable Rain
Wheat futures have responded to favorable precipitation forecasts by dropping in price the most in five weeks today and yesterday. Rainfall is expected from Australia to here in the US with the outlook of easing drought conditions.
Wheat futures fell 2.3% in Chicago – the biggest drop since late February and maybe some optimism for the world’s largest exporter. Wheat futures are currently trading at $6.73 per bushel – up .04c from yesterday’s closing price.
The technical trend for wheat futures is up, however I believe we may be seeing a transition in trends soon by recent price activity. I may be looking to probe the short side of wheat futures soon…
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.
Seven-Week Low Sparks Interest in Gold Futures
Gold futures have seen their first meaningful rise in price since the last week of March. The outlook is for gold futures to possibly rise after this seven-week low with demand from China for bullion and jewelry.
In China, a prominent banking firm claims their gauge for measuring gold demand increased last month. In Iraq, their central bank is actively trading gold with public sales, and reportedly importing gold bars for resale to goldsmiths.
“Physical demand from China increased enough to support the rise. Although, the recovering stock market and strong U.S. economic data may prove an issue for continued higher sessions in the gold, as it may no longer be needed as a safe haven long term investors,” stated Barb Levy, chief director for The Fox Group’s futures division in Chicago, regarding the current gold futures situation.
This last sell-off in gold futures have turned the official trend (the way I trade this market, anyway) to the downside. Before I do anything with the short-side of gold futures, I would prefer to see some type of temporary rally first.
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 at Crossroads as Inventories Shrink
A sugar miller’s group states sugar exports from Pakistan are expected to decline as much as 17% this year after record sales from last year took from inventories. Pakistan happens to be the world’s fourth-largest producer of the sweet-stuff.
The chairman for the Pakistan Sugar Mills Association estimates sugar exports dropping to only one-million metric tons from the fiscal year that began in October. This is down from 1.2M tons of sugar that were shipped in the 2012-2013 season.
Kevin Riordan, director of research at Capital Trading Group in Chicago, had this to say regarding the current sugar futures situation, “Regardless of the fact that the price levels for sugar (futures) currently are not attractive, it’s very important that Pakistan move its surplus sugar. This would enable it to pay the local farmers and take some excess supply out of the market.”
This news is coming at a time when sugar futures have recently rolled over into a technical down trend (in my work). I am looking to go short sugar futures, but only on a temporary spike in prices today.
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, Lean Hogs, Cotton, Feeder Cattle, CBT Wheat, Kansas Wheat and Sugar (New this week.)
DOWN Trending Futures Markets: Copper
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.
Retreat from 10-Month High on U.S. Crop Outlook; Wheat Futures
The outlook for wheat futures remains that cold & dry weather will reduce the forthcoming yield potential in the fields of the world’s biggest exporter of wheat (here in the US). This view is seen in the ten-month high in wheat futures prices just this morning.
A prominent weather forecaster stated in a report earlier today about two-thirds of the wheat growing region will remain dry for the remainder of this month. Other USDA data reveals wheat crops deteriorating in both Kansas & Texas as of last weekend and the ongoing drought in Texas has expanded north of its boarders.
Matt Zeman, a senior commodity broker at Kingsview in Chicago, had this to say regarding the current wheat futures situation, “The wheat crop is in danger of seeing significant yield losses, and the dry forecast is not doing the (wheat futures) market any favors.” Zeman adds, “Wheat needs rain-and lots of it very soon.”
The trend in wheat futures is up with no top yet in sight. We had been long Kansas City Wheat until the “target price” was realized, and we exited CBT Wheat when it was realized the market couldn’t hold its gains.
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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