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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:
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.
Soybean Futures Rebound on Signs of Tight Domestic Supplies
Soybean futures have been lifted from a recent pull-back in prices in the last week amid signs of contracting US soybean stockpiles. Soybean futures are up over 0.15 cents per bushel (as of this writing) following a near 0.30 cent rise yesterday.
He’s the good news for US soybean farmers: industry data revealed earlier this week shows demand from domestic soybean processors rose almost 4% in February compared to the same time last year. Plus, soybean exporters have sold more of their product since the marketing fiscal year began in September than the USDA projected for the full season.
Laura Taylor, a senior commodities broker at RJO Futures in Chicago, had this to say regarding the current soybean futures situation, “Soybean (futures) continue to attract capital on the buy side as expectations of tightening of US stocks offer support.”
The trend for soybean futures remain UP, the market tests its March 7th recent highs. We are long soybean futures, but I have tightened the protective sell stop earlier this morning.
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.
Drought Conditions in Asian Growing Areas Bullish for Soybean Oil
Soybean oil may be in for a boost in price very soon. The world’s top three palm oil producers in SE Asia claim “prices have the potential to rise” because of drought conditions in the growing areas of Thailand, Malaysia, and Indonesia.
The Hamburg, Germany research group “Oil World” stated in their report dry weather for the past two months has created moisture shortages for some plantings and water rationing. They also say continue dryness in the next two weeks may prompt “an even more bullish supply scenario” for the forthcoming year.
Christian Moreno, a commodities broker for HighGround Trading Group in Chicago, had this to say regarding the current soybean oil futures situation, “Oil share is getting hit again. The tightness in soybeans and soybean meal is leaking into the soybean oil.” Moreno added, “Expect soybean oil to move higher.”
Soybean oil’s trend is up despite the pull-back in price since the March 7th high. I am looking for buy signals in soybean oil as of this writing.
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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