Happy Thanksgiving week ahead market watchers!  

Markets will be closed Thursday for turkey day, but will re-open Friday although light trade is expected on both Wednesday and Black Friday.  To really get the holiday season underway, retail sales ahead will be an important barometer of consumer strength amid mixed data signals at present.  

Equity markets found support again early this week with meaningful strength extending through Friday’s close inching closer to post-election highs.  

Geopolitical headlines this week were more in focus with outgoing President Biden blazing a trail permitting Ukraine to launch US-made long-range missiles into Russia.  Putin increased rhetoric as a result lowering the threshold for use of nuclear weapons, stepped up attacks on Ukraine and warnings that NATO countries that provide weapons to Ukraine that are used against Russia opens the door to attacks on them directly.  

It is a dangerous time for Biden to be upping the ante given his lame duck status and transition in Congress.  President-Elect Trump has hinted toward negotiating a cease fire, which Putin acknowledged this week, but is further complicated by the current escalation. However, it also demonstrates how both sides are posturing for a position of strength ahead of any such negotiations.  

Repositioning is in fact happening around the world after the Trump re-election with China’s President Xi meeting with Brazilian President Lula da Silva this week in Brasilia signing bilateral agreements for increased cooperation with agriculture a primary focus.  Brazilian grain sorghum has now been accepted by China to add to newly opened access for corn in recent years.  Increasingly, Brazil is taking China market share away from US cattle, grain and oilseed producers.  
 

Perhaps this is another sign that consideration for diversified crop options in the US will be of growing importance, something that I through Enterprise Grain have been working on for the past 8 years.  This change could also come from within as Trump’s pick for the Secretary of Heath and Human Services, RFK Jr., being very outspoken on highly processed additives in foods many of which stem from commodity grains.  Shares of food processing companies including CPG brands were under pressure with more scrutiny expected over food additives and ingredient labels especially for products for children.  

On the surface, this is a welcome focus with highly processed foods and beverages contributing to our country’s issues with poor health and obesity.  However, the way in which this is manifested in policy and subsequent regulations will be critically important to the effectiveness and disruptiveness of supply chains as well as prices at the point of purchase. Bottomline is to expect changes in many industries some of which will be material and likely early in the next Trump Administration.  

The approach to crypto has indeed been one of those temperature changes we have already seen playing out.  Bitcoin has been having its day in the sun since the election with the crypto currency finally reaching the 100,000 per token level on Friday.  

The US dollar has also rallied aggressively reaching the highest levels since mid-November 2022, to highs above 108.00.  This is typically a headwind for commodities and likely keeping a cap on what could be move dovish conditions, but it did not prevent notably strong US corn, wheat and soybean export sales this week.  

Despite China’s coziness with Brazil, they were back in the market for US soybeans this week.  Mexico was back for more US corn with this week’s purchase the largest in 6 years. Despite strong soybean sales, futures were softer as the week progressed with improved conditions and outlook for the Brazilian crop.  Friday’s low at $9.75 ¼ was a new low for the week and the lowest level since contract lows from mid-August at $9.73 ½.  January soybean futures rallied back into the close Friday and hopefully that low will continue to hold and see another rally back to $10.00 and above.  I think it’s possible, but we need to hold Friday’s low.  

Expectations for Brazil to crush more soybeans this year could help support the demand side.  The plunge in palm oil prices with Indonesian stocks rebounding after an historically weak export month has been a drag on soybean oil prices, but held above mid-October lows.  



With continued moisture improvements across the Southern US Plains, winter wheat conditions improved jumped 5 percent Good-to-Excellent this week to the best levels in 5 years.  There are still wheat acres to be planted with deadlines past and/or quickly approaching for crop insurance coverage by the end of the month.  I expect quite a few acres intended to be planted not getting planted and will remain fallow over the winter.  
 

Other than the obvious commodity crops, spring oats, barley and camelina are great options for producers.  Call Enterprise Grain to learn more about these programs along with seed availability and market pricing.  Also, ask about variable rate nitrogen before topdressing this year.  Ninja Ag (ninjaag.com) has proven technology to accurately forecast grain yields to assist in risk management and marketing, but also in specifying how much nitrogen you need and where in the field you need it as well as not need it.  The technology reads real-time NDVI imagery from satellites or drone imagery to accurately and exactly place nitrogen and in the quantities that you need in the form of a shape file for your or your Coop’s application rig.  

At a time when margins are extremely tight, but topdressing is necessary to enhance yield especially when margins are tight, Ninja Ag variable rate nitrogen solution is a must have and not a nice to have.  This is as simple as variable rate lime after taking grid samples, which pays every time.  Embrace this available technology to sharpen your budget and “let the field do the talking” in determining how much nitrogen you need and where it is needed instead of just over or under applying with flat rates.  Using this solution requires absolutely no knowledge of precision technology, but instead just the willingness to seek a better solution that translates directly to your bottom-line.  
 

Wednesday’s close on KC wheat above the downward sloping trendline that’s been in place since the October 3rd high looked like a breakout could be possible, but faded with Thursday’s selloff.  We closed the week basically right-at-below that trendline and so we will have to see how we trend next week with Black Sea tensions escalating.  

They say, “oats know” and the oat futures had an outside chart day, higher high and lower low, on Friday that could signal a reversal higher after the recent selloff.  Watch the oat contract early next week for signals in the wheat market.  Freezing temperatures this weekend are taking US and Black Sea into dormancy with adequate moisture, but limited growth in many areas.  

By far the most exciting contracts this week were the feeder cattle futures.  In six trading sessions/days, feeder contracts had a high-low range of $12.25 per cwt!  That’s a meaningful move in such a short period of time.  Indeed the cattle are not out there, but that has long been the case and so the buying action was impressive to say the least.  
 

Fed cash cattle trade was $2.00 per cwt higher this week with $187.00 in Kansas setting the high.  

USDA released its monthly Cattle-on-Feed report on Friday at 2 PM, after the close. While the pre-market indicated it could or should be a bullish report, the numbers told a different picture. November 1st on-feed was slightly higher than expected at 100.3 percent of last year versus 99.9 percent expected although this was largely in line.  October placements, however, came in larger than expected at 105.3 percent of last year or 5.3 percent higher versus expectations of 3.8 percent higher than this time last year.  Marketings in October came in at the bottom of trade expectations at 104.7 percent versus 105.2 percent estimated.  
 

At face value, this report has a bearish bias, but it is difficult to get overly bearish on the cattle complex, especially after the recent strength.  Having said that, these are healthy prices to protect that seemed far from reach just one week ago.  Keep the upside open, but protect the progress we’ve made with put options or LRP.  

Sidwell Strategies is the one-stop shop to protect cattle with futures, puts, LRP or a combination of all, which is probably the best strategy overall.  If you’re ready to trade commodity markets, give me a call at (580) 232-2272 or stop by my office to get your account set up and discuss risk management and marketing solutions to pursue your objectives.  Self-trading accounts are also available.  It is never too late to start and there is no operation too small to get a risk management and marketing plan in place.  

Wishing everyone a successful trading week!  Let us know if you'd like to join our daily market price and commentary text messages to stay informed!

Brady Sidwell is a Series 3 Licensed Commodity Futures Broker and Principal of Sidwell Strategies.  He can be reached at (580) 232-2272 or at brady@sidwellstrategies.com.  Futures and Options trading involves the risk of loss and may not be suitable for all investors. Review full disclaimer at https://www.sidwellstrategies.com/fccp-disclaimer-21951.