Commodities Overview Nov 2023 Edition


Read the full November 2023 Edition HERE


In November the USDA raised U.S. corn production 170 mil. bu. to a record 15.234 bil. roughly 150 mil. above expectations. The average U.S. yield was raised nearly 2 bpa to 174.9 bpa. Most of the production increase was offset by higher demand as feed usage and exports were raised 50 mil., while usage for ethanol was up 25 mil. Ending stocks are now projected at 2.156 bil., 25 mil. above the average estimate and the highest in five years. We remain skeptical of the USDA’s export forecast, which in order to achieve will likely require much lower South American production than what is currently being projected. The U.S. average farm price was cut $.10 to $4.85 bu. World stocks for 2023/24 were increased 2.6 mmt to 315 mmt, above expectations of 312 mmt. There were no changes to the South American production forecasts, while Russia’s crop was increased 1.4 mmt and Ukraine’s was increased 1.5 mmt. Exports from these Black Sea countries were increased a total of 1.6 mmt.

Live Cattle

From the COVID outbreak in 2020 to the severe droughts over the past three years in Western states throughout the Southwest to record breaking high summer temperatures in the Southwest and mid-Plains in 2023, there were significant impacts on cattle on feed inventories. As cattle on feed numbers fell, beef prices went up. By October 31, 2023 year-to-date federal cattle slaughter was down 4.6% from the same period in 2022.

Lean Hogs

From July 2023 through October 2023 lean hog futures traded in a $7.00 range. October 2023 lean hogs on July 3 settled at $79.60, then moved up to $86.00 on July 31, dropped to $78.17 on August 16, moved up to $85.77 on September 20 and closed out trading on October 13 in the middle of the range at $81.97. At the beginning of October 2023, U.S. federal hog slaughter year- to-date was 1,274,000 head above the same period in 2022. By the end of October 2023 the year- to-date slaughter was 1,552,000 head above 2022, which is an increase of 278,000 head in one month.

livestock roaming on the range

Stock Index Futures

Stock index futures traded higher in response to the weaker than expected U.S. employment report. The logic is that a weaker economy takes pressure off the Federal Reserve to increase interest rates, which is supportive to stock index futures.

US Dollar Index

The U.S. dollar fell to its lowest level since September 20 when the bearish October consumer price index was reported. The U.S. dollar has underperformed the news since early October. There was only limited strength in the greenback despite hawkish comments from U.S. policymakers. While the Fed sounds hawkish now, many analysts believe the Fed has hiked its fed funds rate for the last time in this cycle, which will tend to undermine the U.S. dollar. In addition, there has been only a limited flight to safety flow of funds into the U.S. dollar in light of ongoing geopolitical tensions.

Euro Currency

The euro currency was supported by news that German investor morale improved more than expected in November. The ZEW economic research institute said its economic sentiment index improved to 9.8 points from -1.1 points in October, beating forecasts. However, the assessment measuring the current situation in Germany was virtually unchanged, rising by 0.1 points to -79.8.

Crude Oil

Crude oil futures fell toward $77 per barrel as investors remained cautious about the possibilities of weaker demand and a global economic slowdown, as traders watch for key economic indicators out of the U.S. and China, which are two of the world’s largest oil consumers. There was temporary support amid growing expectations that OPEC+ will reduce supply further to increase prices ahead of its meeting on November 26. Analysts pointed to higher-than-expected inventories supporting a potential move by OPEC+ to reduce production. Traders also expect Saudi Arabia and Russia may roll over additional voluntary production cuts into early 2024. There was some support for crude oil futures in light of a sharp decline in the U.S. dollar, which makes U.S. dollar-priced commodities more attractive to foreign buyers.


December gold futures advanced above $2,000 an ounce, marching toward its highest level since late October. The yellow metal has benefited from a sharp decline in the U.S. dollar amid growing expectations that the U.S. Federal Reserve has hiked its fed funds rate for the last time in this cycle. The U.S. central bank is widely expected to keep rates unchanged again at its December 13 policy meeting.


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