The US dollar index has weakened since last Wednesday's settlement, though the global currency spotlight remains on the Russian ruble.
Gold continues to find buying interest ahead of another potential Chaos filled weekend.
The corn market is Livin' on the Edge as it comes out of the US holiday and into the last trading session of the month.
Morning Summary: While the US spent Thursday eating and watching football (the North American version of the sport) the rest of the world kept on turning and markets continued to trade. The US dollar index ($DXY) was quietly lower during yesterday’s holiday, before weakening again through early Friday morning. The green back dropped as much as 0.47 from Wednesday’s close, putting it 2.46 below its recent high of 108.07 from a week ago today. This has the index in position to complete a bearish 2-week reversal pattern on its weekly chart, what would be an interesting development as we turn the calendar page to December. There has been a growing focus on the Russian ruble and the ripple effects on global wheat demand. I’ll discuss this in more detail shortly. Gold remains strong, gaining as much as $25.70 (1.0%) overnight. And while the Feb issue (GCG25) has rallied $60.80 since this past Tuesday’s low, it has retraced only 50% of its break from Monday’s high of $2,748.00. I’m expecting gold to stay supported heading into another weekend of potential geopolitical intrigue and chaos. Global stock indexes were mixed as November moves toward its end, setting the stage for today’s leftover holiday shortened session in US markets.
Corn: When we left the corn market Wednesday afternoon, a number of contracts were within sight of key technical support prices. When we see this situation develop, I’m reminded of a couple things: 1) Aerosmith’s song “Livin’ on the Edge” (You can’t stop yourself from falling. You can’t help yourself at all.), and 2) Newsom’s Market Rule #4B: A market that can’t go up won’t go up. Corn is filled with bullish factors, both technical and fundamental, yet has been unable to generate consistent buying interest. Since mid-July, Watson has moved from a net-short futures position of 240,000 contracts to a net-long of nearly 178,000 contracts, a switch of about 418,000 contracts. Meanwhile, the Dec24 futures contract rallied roughly 50 cents from its late August low of $3.85 through its early November high. The peak of $4.3475 was posted the week of the US presidential election with Dec24 consistently sliding since. Speaking of Dec24, it starts its ride into the sunset with Friday being first notice day. Fundamentally the market continues to see commercial support. Wednesday evening’s national average basis calculation came in at 27.25 cents under March futures (ZCH25) as compared to last Friday’s figure of 28.75 cents under March. Futures spreads are also bullish heading into the last trading day of the month.
Soybeans: It’s a similar story in the soybean market, though here the January issue (ZSF25) continues to rally off its series of lows near $9.75. Wednesday saw Jan25 post a high of $9.9425 before closing at $9.8875, up 5.25 cents for the day. Soybeans don’t have the same fundamental support as corn, particularly longer-term. The May-July futures spread, our best read on Brazil’s 2025 crop, finished Wednesday covering a neutral 44% calculated full commercial carry, unchanged from last Friday but still moving away from the end of September’s bullish reading of 29%. As for short-term fundamentals, the National Soybean Index (national average cash price) was calculated near $9.3750 Wednesday evening, correlating to an available stocks-to-use figure of 18.1%. At the end of October the NSI was $9.29 putting as/u at 18.4%. My latest national average basis calculation came in at 51.25 cents under January futures, generally unchanged from last Friday’s figure with this week’s previous 5-year average weekly close at 49.0 cents under January. We’ll get the latest weekly export sales and shipments update, for the week ending Thursday, November 21, later Friday morning. That week saw announced sales of 1,022,464 mt of 2024-2025 soybeans, thought total sales for the week will likely be larger.
Wheat: As I mentioned in the opening Summary, the wheat sub-sector is garnering a good deal of attention these days. Much of the discussion is centered on the recent weakness of the Russian ruble (RUBUSD) making that country’s wheat supplies more attractive on the global market. I don’t see it as a major factor, with my side of the debate being politics play a larger role in world wheat than economics. Since Russia invaded Ukraine nearly 3 years ago, its key buyers didn’t stop buying from Russia despite sanctions put in place by the US and its western Allies. If we use USDA WASDE numbers (I’ll give you a moment to laugh at the idea), we see Russia’s estimated exports never slowed. In fact, if these numbers are to be believed, Russia posted record large wheat exports during the 2023-2024 marketing year with USDA’s estimate coming in at 55.5 mmt. Meanwhile, the US dollar index was at its recent weakest level during the 2023-2024 marketing year and the United States could only muster export shipments of 681 mb. For the record, with the green back firming during 2024-2025 US shipments were on pace to reach nearly 800 mb. USDA’s latest guess was 22.45 mmt (825 mb).
