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Ag Markets Retreat as November Winds Down

Author: Doug Christie

Fundamental: Major ag markets entered and exited the US Thanksgiving holiday period with a quiet and softer feel. Corn, wheat and soy all posted 2-3% declines over the five-day period ending November 28. Cotton was also lower, with a 1.3 % price decline over the same period.

The November 27 Crop Progress Report showed corn 96% complete, with cotton coming in at 83%. This is the last report for the 2023 growing season and it unofficially marks the transition to South America as the key driver of supply variability. Prospects there remain favorable at this stage of the growing season, but with enough time until harvest for the crop to remain vulnerable, as indicated by some private soy forecasters this week, who put out estimates below the latest WASDE figure.

Technical: Corn techs remain bearish, with the market positing calendar-year lows coming out of the Thanksgiving holiday. Specs have increased their short in the corn market over the recent downturn while relative strength indicators in that market are flashing oversold, and these factors may help support prices in the near term.

Soy tech signals remain weakly bullish as moving averages are narrowing toward a bearish cross. Mild signals remain in tech indicators.

Wheat and cotton also show weak bearish moving-average signs. Cotton managed money is back to even as of the November 21 report after a brief dip into a net short.

Macro: The USD weakened by 1.7%, lending nominal support to the idea of increased US ag exports, and crude oil markets were slightly weaker as well. Ag prices will need to make their own way, with no compelling head or tail winds coming from outside markets.

Trading strategy is based on the author's views and analysis as of the date of first publication. From time to time the author's views may change due to new information or evolving market conditions. Any major updates to the author's views will be published separately in the author's weekly commentary or a new deep dive.

This content is for educational purposes only and is NOT financial advice. Before acting on any information you must consult with your financial advisor.