Top 5 Key Market Movers to Watch for the Week of December 3 2023

Top 5 Key Market Movers to Watch for the Week of December 3 2023
Nov 30, 2023

This week there are 5 key reports to watch that could have significant impacts on commodity markets the week of December 3 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.

Last USDA crop progress report for the year reported!

By Colin McNaughton Risk Management Intern

  1. There will be no USDA crop progress report next week as the last report of the year was released on Monday. The report showed U.S. corn harvest is 96% complete, a 3% increase from last week. Michigan saw a 12% jump in its harvest progress, but still lagging behind other states at 79% complete. Michigan’s 5-year average stands at 83%, and at this time last year, harvesting was 94% complete. There is a forecast for winter storms in the state which will delay harvesting activities.

    Soil moisture improved across the U.S. as adequate-surplus levels in topsoil increased by 5% up to 59%, with subsoil increasing by 3% up to 50%. Winter wheat conditions also improved by 2%, now up to 50% rated good-excellent but higher than a year ago. Seeing these conditions improving is a good sign as the winter is expected to be dry, so any moisture is welcome. Next week we will transition to the South America crop progress and whether the drought in Brazil gets worse.
  2. Next week’s reports will be released as per the usual schedule, with the USDA grains inspected for export report on Monday, December 4th, the EIA ethanol data on Wednesday, December 6th, and the weekly export sales report on Thursday, December 7th. In this week’s U.S. export sales were huge as both corn and soybeans came in at 1.9 mmt. Some demand from China was stolen by cheaper Brazilian soybean prices, estimated at 20%. Expectations are for those numbers to rise again over time. Wheat export sales were strong as well, coming in at 622,000 mt as China was buying again. That means all three of corn, soybeans, and wheat came in above the trade expectations with corn and soybean sales now the 9th consecutive week above 1 mmt!
  3. The U.S. drought monitor map showed worsening drought in the Midwest. For the second straight week, U.S. corn and soybeans saw an increase in how much of the crop was affected by drought while winter wheat saw a decrease. As it stands, 44% and 47% of corn and soybeans are affected by at least D1 drought. That is up from 42% and 45% respectively in the week prior. U.S. winter wheat is now just 38% affected by D1+ drought, down from 41% last week. The worsening drought conditions in the Midwest could be a sign that the dry winter is starting early.
  4. The Mississippi river is currently above the low stage, which is considered anything over 5 feet below normal levels. Current water levels stand at 4.6 feet below normal. However, by the end of next week, water levels are expected to be 7 feet below normal and will continue to fall afterwards. 2 weeks from now, water levels are expected to be over 8 feet below normal. This will continue to impact freight rates, U.S. exports, inspections, shipments, fertilizer prices and basis. Read related article:
  5. The U.S. economy is even hotter than initial projections with Q3 GDP growth is now estimated at 5.2%, higher than the 4.9% increase that was initially reported. Experts say there is now a 77% probability that U.S. interest rates start to fall in March of 2024 up from 45%! However, the Fed’s favourite inflation gauge, personal spending, was in line with expectations at a 3.5% increase year-over-year. A lower interest rate environment in 2024 could encourage more fund buying of commodities and P/E valuations will start to expand again especially in the big tech stocks.

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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