Will crude oil futures gain back some of the losses we saw this week?
This week there are 5 key reports to watch that could have significant impacts on commodity markets the week of November 26, 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 last USDA Crop progress report will be released on Monday, November 27th. The recent report showed some advancements in the corn harvest, now up to 93% complete. There was no data on the U.S. soybean harvest as it is largely complete. U.S. Winter wheat saw an improvement in conditions, coming in at 48% good-excellent up 1% vs. the prior week and expectations of 47%. Soil moisture worsened again as topsoil moisture levels rated as adequate-surplus decreased by 3% to 54%. Subsoil was similar as it saw a 2% reduction in its A-S levels, down to 47%. Kansas continues to struggle as 74% of its subsoil is rated as very short-short.
2. Next week's reports will be released as per the usual schedule after a shortened U.S. thanksgiving holiday this week. The grains inspected for export report will be released on Monday, November 27th, EIA ethanol data on Wednesday, November 29th, and the weekly export sales report on Thursday, November 30th. Fuel ethanol production decreased over the past week as the average production per day was 1.023 million. That is down from the previous week's 1.047 million barrels per day. The weekly U.S. export sales report is delayed until Friday, November 24, due to the U.S. Thanksgiving holiday."
3. The USDA drought monitor map and Ag in Drought report were released early yesterday instead of the usual Thursday release. The report showed an increase in drought for U.S. corn and soybeans, while winter wheat areas improved; 42% and 45% of U.S. corn and soybean areas are affected by at least D1 drought, up from last week's 40% and 42% respectively.
On the other hand, winter wheat saw a decrease in its drought affected areas, down 3% to 41%. That is thanks to a big removal of drought in Washington’s crop area. Last week's report showed 73% of Washington's winter wheat was in drought, which is now down to just 45%. That reduction includes almost a complete removal of drought conditions rated D2 or higher. The first week of the forecast shows dryness across most major winter wheat areas including Kansas and Washington, while some precipitation is added in the second week. The mixed weather should give an opportunity to complete any harvesting activities in corn and soybeans that are remaining while also giving the drier crop areas some relief.
4. The Mississippi river water levels currently stand 8.51 feet below normal which is causing some shipment issues in the U.S. However, the projections show that by late next week water levels are expected to rise to just 4.3 feet below the normal level. That is above the “low stage” threshold of 5 feet below normal. The relief will be short-lived as water levels are projected to drop back down to roughly 9 feet below normal by the first week of December. Read the related article: Trouble with global trade routes.
5. U.S. crude oil futures are down after OPEC delayed their important meeting on production cuts that was scheduled for this weekend. The meeting will now take place next Thursday, November 30th. While OPEC did not specify the reason for the delay, Bloomberg reported that sources said that Saudi Arabia is facing challenges in persuading Angola and Nigeria to agree to reduced output targets. Traders had been increasingly anticipating the possibility of OPEC and its allies, known as OPEC+, implementing supplementary production cuts. This anticipation contributed to a rise in prices towards the end of last week and the beginning of this week. If there are production cuts, we could see crude oil futures gain back some of the losses we saw this week.
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