Top 5 key market movers to watch the week of July 9th, 2023

Jul 06, 2023

This week there are 5 key reports to watch that could have significant impacts on commodity markets the week of July 9, 2023. This Farms.com 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
Farms.com Risk Management Intern

1. The weekly USDA crop progress report will be released as per usual on Monday, July 10th next week. After some improvements in U.S. crop conditions this past week look for a further drop as weather remains dry in the U.S. Midwest for the next 7 days as we enter corn pollination. Top and soil moisture levels will continue to get depleted after last week’s Derecho storm provided some relief.

2. Next week’s USDA reports will be released as per usual, including the USDA grains inspected for export report (Monday, July 10th), USDA weekly export sales report (Thursday, July 13th), and the EIA ethanol data (Wednesday, July 12th). The recent grains inspected for export report showed improvements in corn, soybeans, and wheat compared to last week. We saw increases of 16.7%, 71.2%, and 64.5% respectively from last week. Continued momentum will be the focus to see if we can push back closer to last year’s numbers.

3. The latest drought monitor map update showed less improvement than anticipated. Widespread rains in the Midwest last week had limited impact on the overall U.S. drought situation, with drought percentages resembling 2012. There is potential for more rain in parts of the Corn Belt due to a slight change in weather patterns, but the northern Corn Belt is unlikely to see much relief in the next seven days. The National Drought Mitigation Center reports that 67% of the U.S. corn crop down 3% and 60% of soybeans are still in drought down 4%, with minimal improvements despite the crops entering the tasseling stage.

4.The monthly WASDE July crop report is set to be released on Wednesday, July 12th, and all eyes will be on the corn yields per acre. The USDA June crop report kicked the can down the road and kept the 2023 U.S. corn yield unchanged at 181.5 bushels per acre. However, with persistent drought throughout the month of May/June and now July especially within the U.S. corn belt, expect this number to drop. We have had some rain recently, but not enough to reverse the impact that the drought has had on the crops. The trade and markets are trading at 175 bpa yield, but will the USDA surprise to the downside?

5. U.S. CPI and U.S. Fed meeting is scheduled for July 12th, 2023. A larger than expected jobs report in June double vs. expectations has the markets spooked on fears that there will be more Fed tightening ahead. Unless the labor market cools down some experts argue that the U.S. Fed will no stop raising interest rates as it tries to cool off an overheating U.S. economy.

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

Video: Will the 2025 USDA December Crop Report Be a Market Mover/Surprise?

Historically, the USDA December crop report is a non-event or another dud report as the USDA reserves any final supply changes to the final report in January of the following year in this case 2026. But after the longest U.S. government shutdown in history at 43 days and no October crop report will they provide more data/surprise and make an exception?
Our China U.S. soybean purchase tracker is now at 26.6% or a total of 3.2 mmt but for traders it’s taking too long to unfold.
The final Stats Canada production report was bearish canola and wheat projection a record crop in both (it adds to the global glut of supplies) and bullish local corn and soybean prices in Ontario/Quebec thanks to a drought. It will not help the fund flow short-term, the USDA may need to offset it?
A U.S. Fed interest rate cut of another 25-basis point next Wednesday (probability 87.1%) could help fund flow and sentiment in stock and ag commodities into year end.
More inflows into Bitcoin this past week saw prices rebound back above 90,000 with support at 82,000 and resistance at 96,000.
A V-shaped bottom in cattle suggest the lows are in after Mexico reported another new world screwworm case. Lower weights, seasonal demand and higher U.S. beef select/choice values with a continued closure of the Mexican border to cattle will result in a resumption of higher cattle futures into yearend.
Australia is expected to produce its 3rd largest wheat crop ever at 36 mmt adding to the global glut of supplies.
Reports of ASF in hogs in Spain the largest pork exporter in Europe could see the U.S. win more pork export business long-term.
If the rains verify into next week of 3-5 inches for Brazil it would go a long way to fixing the dry regions from the last 2-months, but the European weather model has been wrong for the past 2-months!
Natural gas futures are surging to the 3rd price count as frigid hold temps set in.
CDN $ is also surging to end the week on a very resilient economy and better employment numbers suggesting no interest rate cuts next week.
Finally, the CFTC report showed funds were net buyers of soybeans but sellers of corn, canola and wheat. In real time the funds have gone back to selling as they take some profits.