11.4.22 Market Recap

This week’s action:  

Corn Dec up 1 @ $6.81

Beans Jan up 62 @ $14.62

KC Wheat Dec up 29 @ $9.54

Feeders Nov up 1.25 @ $177.825

Fats Dec down 1.25 @ $151.65

Hogs Dec down 3.15 @ $82.975

Crude Dec up 4.43 @ $92.01

Recap:

We began the week with news of Russia saying they were no longer interested in the export corridor from Ukraine. That resulted in a quick 65 cent rally in wheat, 20 cent rally in corn, and 60 cent rally in soybeans. The only row crop to sustain its rally through the week was soybeans following new contract highs in soy oil. As a blending ingredient for alternative energies, soy oil prices keep rising to meet demand. Kansas corn basis has softened a bit this week as treaders figure out logistics to meet demand. Nebraska basis should be supported near term by ethanol plants lacking coverage Nov/Dec and improved operating margins. With the moves in corn and ethanol markets this week, margins improved the equivalent of $1.20/bushel.

The November WASDE is due on Wednesday. StoneX projects corn at 174.5 bpa and soybeans at 50.9 bpa, while Informa is using 172.9 and 50.3. USDA in October stated corn yield at 171.9 and soybeans at 49.8.

The Argentine corn planting progress is significantly behind last year. It is 23% today compared to 39% last year and the 40% 5-year average. Brazilian planting progress is similar to last year and consistent with the 5-year average at 74%.  Europe’s warmest October in 40 years has accelerated wheat growth to the point the crop is now susceptible to frost.

Forecast:

It will be cool/dry in Brazil and Argentina the next week. Showers and warming temperatures are expected to follow which will aid crop development.

The western corn belt is expected to remain dry next week. On the bright side, rains in the upper Midwest would go a long way towards re-establishing Mississippi River depth.

Outside Markets:

G7 countries agreed to set a price cap on Russian oil beginning December 5^th. The price cap will be established later this month in an attempt to limit Russia’s ability to fund war. U.S. diesel availability is at a 10-year low, and the Northeast is becoming increasingly concerned about heating oil this winter.

The U.S. dollar softened on Friday after a better-than-expected jobs report. America added 261,000 jobs vs expectations of 200,000. We have added 4 million jobs this year. Unemployment did rise from 3.5% to 3.7%, though.

As expected, the Fed raised interest rates another .75% this week. It is expected they will raise rates by .50% in December on their way to a 5% base rate. We are currently at 4%. Benchmark 10-year Treasury yields to 4.2%.

Something that Probably Means Nothing:

59% of Americans want daylight savings time to become permanent year-round. The U.S. Senate unanimously voted to make daylight saving time permanent this past March. The House of Representatives appears unlikely to vote on it this session, effectively killing the bill.

Have fun changing your clocks Sunday!