Market Movers to Watch for the Week of July 1st 2024

Jun 28, 2024

Russion weather will have an impact on commodity markets this week

This week there are four key reports to watch, plus weather in Russia, that could have significant impacts on commodity markets the week of; July 4, 2024. This Farms.com 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 Devin Lashley
Farms.com Risk Management Intern

1. The U.S. Employment Report comes out Friday July 5th and will likely show a decrease in the unemployment rate in the U.S. as First-time applications for U.S. unemployment benefits decreased last week, but the number of people on jobless rolls surged to a 2.5-year high in mid-June, indicating that labor market conditions are easing amid slowing economic growth.

2. The USDA Crop Progress Report comes out Monday July 1st and will continue to show lower crop conditions in both corn and soybeans after a 1,000 year flood hit the Northwestern U.S. impacting as much as 10 percent of the acres close to 18 million! According to Maxar Weather, the 2024 U.S. corn crop is expected to reach 50% pollination on July 17th, 2 days earlier than the 5-year average and on par with last year.

3. The U.S. Drought Monitor report will be out on Friday July 5th (Markets are closed July 4) and will show an expansion of the drought in the Southeast US -- Kansas, Texas and Oklahoma -- where crops are burning up. These are less important U.S. states because they are smaller producers vs. Illinois, Indiana, and Iowa, so not a big concern with the big hedge funds - at least for now.

4. Keep an eye on the weather in Russia, prolonged dry weather and frosts have already decimated the Russian wheat harvest. With little to no rain forecasted for either the southern growing regions or the growing regions in western Siberia we could see more headline news that early wheat yields are lower than expected.

5. The USDA Fats and Oils, Oilseed Crushing’s, Production, Consumption and Stocks report comes out Monday July 1st and will likely show continued strength, following a positive crush report from the National Oilseed Processors Association (NOPA) earlier this month. The NOPA report tallied May crush at 183.63 Mbu among its members. That was a record for the month, more than 5 Mbu above the average trade guess, and an 8.37 percent increase from the April dip.

For daily information and updates on agriculture commodity marketing and price risk management for North American farmers, producers, and agribusiness visit the Farms.com Risk Management Website to subscribe to the program.

Video: Will the 2025 USDA December Crop Report Be a Market Mover/Surprise?

Historically, the USDA December crop report is a non-event or another dud report as the USDA reserves any final supply changes to the final report in January of the following year in this case 2026. But after the longest U.S. government shutdown in history at 43 days and no October crop report will they provide more data/surprise and make an exception?
Our China U.S. soybean purchase tracker is now at 26.6% or a total of 3.2 mmt but for traders it’s taking too long to unfold.
The final Stats Canada production report was bearish canola and wheat projection a record crop in both (it adds to the global glut of supplies) and bullish local corn and soybean prices in Ontario/Quebec thanks to a drought. It will not help the fund flow short-term, the USDA may need to offset it?
A U.S. Fed interest rate cut of another 25-basis point next Wednesday (probability 87.1%) could help fund flow and sentiment in stock and ag commodities into year end.
More inflows into Bitcoin this past week saw prices rebound back above 90,000 with support at 82,000 and resistance at 96,000.
A V-shaped bottom in cattle suggest the lows are in after Mexico reported another new world screwworm case. Lower weights, seasonal demand and higher U.S. beef select/choice values with a continued closure of the Mexican border to cattle will result in a resumption of higher cattle futures into yearend.
Australia is expected to produce its 3rd largest wheat crop ever at 36 mmt adding to the global glut of supplies.
Reports of ASF in hogs in Spain the largest pork exporter in Europe could see the U.S. win more pork export business long-term.
If the rains verify into next week of 3-5 inches for Brazil it would go a long way to fixing the dry regions from the last 2-months, but the European weather model has been wrong for the past 2-months!
Natural gas futures are surging to the 3rd price count as frigid hold temps set in.
CDN $ is also surging to end the week on a very resilient economy and better employment numbers suggesting no interest rate cuts next week.
Finally, the CFTC report showed funds were net buyers of soybeans but sellers of corn, canola and wheat. In real time the funds have gone back to selling as they take some profits.