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Top 5 Key Market Movers to Watch for the Week of November 12 2023

Top 5 Key Market Movers to Watch for the Week of November 12 2023

All eyes are on South America

This week there are 5 key reports to watch that could have significant impacts on commodity markets the week of November 12, 2023. This column tracks key events in commodity marketing impacting the agriculture industry! The series of article shares issues to watch the following week, issues that may have an impact on commodity prices in the coming weeks.

By Colin McNaughton Risk Management Intern

1. USDA’s crop progress report will be released as per usual next week on Monday, November 13th. This week's report revealed that corn and soybean harvests fell below trade expectations, with corn progress reported at at 81% complete, soybeans nearing completion at 91%, and cotton at 57% complete. Both corn and soybeans were 1% below the trade expectations. The slower progress might be attributed to weekend rains before the last report, though overall, the numbers remained ahead of the 5-year average. However, those weekend rains were helpful for the winter wheat areas which were in need of some moisture to help with germination and emergence. The winter wheat conditions stand at 50% good-excellent which is up 3% from the prior week, with very poor-poor ratings down 1% to 17%. These winter wheat areas are expected to experience relatively dry conditions which may cause some further drought stress given that 49% of U.S. subsoil moisture is rated very short-short.

2. Next week's reports include the USDA Grains Inspected for Export report on Monday, November 13th, the EIA ethanol report on Wednesday, November 15th, and the USDA Weekly Export Sales report on Thursday, November 16th. The EIA report comes after this week’s report was not released due to a planned system upgrade. This week’s export sales report exceeded the USDA’s weekly goal in soybeans, while both corn and soybeans showed over 1 mmt in sales. The new number for average weekly soybean sales to hit the USDA’s target is 540,000 mt, and 1.094 mmt in corn. The recent increase Chinese demand for U.S. soybeans is encouraging.

3. Recent weather conditions in the U.S. and South America have been a roller coaster ride as U.S. harvest comes closer to an end, U.S. wheat planting continues, and South American crop planting begins. The U.S. drought monitor map will be out next Thursday Nov. 16th, 2023. Some slight improvements were seen in the U.S. drought monitor map, but drought throughout the eastern corn belt remains a problem. Nearly 24% of Iowa is still battling extreme drought (D3) conditions. Kansas is also still struggling as 63.39% of the key winter wheat producer is affected by at least D1 drought.

But all eyes are on South America. Brazil reported that there were some rains over the last 2 weeks, but with the sandy soils it is not enough to sustain any relief with heat of the charts and its only springtime. Argentina saw excessive heat earlier this week, and it is forecasted to be shifting into center west and center south Brazil this week and into early next week, potentially worsening already brutal conditions.

4. An important U.S. inflation report will be released next week on Tuesday, November 14th. After the GDP growth in Q3 exceeded expectations, coming in at a 4.9% increase, vs. the expected at 4.7%. Falling crude oil prices recently, despite the war in the Middle East, may help inflation drop. September inflation was reported as 3.7% year-over-year, equal to that in August. Fed watchers are suggesting a pause in U.S. interest rates in Dec and Jan. and a possible cut by May of 2024.

5. The USDA cattle on feed report will be released next week on Friday, November 17th. Cattle and calves on feed for slaughter on October 1st came in at 11.6 million head, 1% higher than 2022, and the second highest October 1st inventory since 1996, when the series began. Placements in feedlots during September came in at a total 2.15 million head, 6% above 2022. The seasonal peak may be in for futures, but record highs will be broken again in 2024 as the tight U.S. supplies of cattle will not change anytime soon and the weaker exports are due to less available supplies.

For daily information and updates on agriculture commodity marketing and price risk management for North American farmers, producers, and agribusiness visit the Risk Management Website to subscribe to the program.

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