Top 5 key market movers to watch the week of December 10 2023

Top 5 key market movers to watch the week of December 10 2023
Dec 07, 2023

US Exports continue their strong momentum

This week there are 5 key reports to watch that could have significant impacts on commodity markets the week of December 10, 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. As per usual, next weeks reports include the USDA Grains Inspected for Export report on Monday, December 11th, the EIA ethanol data on Wednesday, December 13th, and the weekly export sales report on Thursday, December 14th. U.S. exports continued their strong momentum corn and soybeans saw 1.2 mmt and 1.5 mmt in sales respectively. Wheat sales were not great but still above the 4-week average at 356 000 mmt this week. Next week is when we will see that number jump as China has purchased over 1 mmt of SRW wheat across three consecutive days earlier this week as floods in China have resulted in poor quality local wheat.

2. The U.S. drought monitor map and Ag in Drought report showed an improvement across the board in corn, soybeans, and wheat. Each saw a 1% decrease in growing areas affect by at least D1 drought but still well below last year. Kansas winter wheat continues to struggle as 63% of the crop remains in drought affected areas. The U.S. Midwest has not seen any snow coverage as crops remain without any solid relief. Conditions in Iowa remain the worst as the large D3 area remains at 27%. An update will be released next week on Thursday, December 14th.

3.Next week, a crucial U.S. inflation report will be released on Tuesday, December 12th. This comes after U.S. GDP growth in Q3 was hotter than initially anticipated at 5.2%. Inflation in the U.S. and Canada in the next 2-3 months could finally fall to the central bank targets of 2.0% and one reason why they should start easing interest rates in Q2 of 2024.

4. Along with the inflationary data, the U.S. Fed will meet next week on December 12th and 13th, and markets are expecting another rate pause. Powell’s comments last week lent support to the notion that the Federal Reserve, at the very least, has concluded its series of interest rate hikes, given that the successive increases since March 2022 have had a dampening effect on economic activity. Powell acknowledged that inflation is trending in a positive direction. Lower job openings and high unemployment are other indications that we are moving in the right direction towards lower interest rates in 2024 in a U.S. election year.

5. As there is no USDA crop progress port next week, eyes turn to South America. According to AgRural, 85% of the Brazilian soybean had been planted, compared to 91% at this time last year, and the slowest pace since 2009. Planting has been slowed by extreme dryness in the north and excessive wetness in the south. Brazilian first-season corn is 83% planted. The December Monsoonal rains have not showed up in full affect and the GFS is much drier. Consultancies continue to lower their forecasts for the Brazilian 24 soybean crop with some going as low as 150 mmt. CNONAB lowered their forecast today, down to 160.177, down 1.4% from November but still higher than last year.

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