Market-moving fundamental data are typically scarce during the traditional holiday season. While the USDA Monthly Supply and Demand report on Dec. 10 is a notable event, it rarely produces significant market shifts. However, other factors, such as the presidential transition and escalating geopolitical tensions in Europe, may create underlying uncertainty.

Let’s focus on three quantifiable factors that could potentially shape market direction this holiday season.

One: A strong U.S. dollar

The U.S. dollar last week reached its highest level since November 2022. A strengthening dollar could slow the pace of grain exports, which have been robust this marketing year. Combined with growing South American supplies, a strong U.S. dollar might prompt global grain buyers to delay purchases, and instead wait to buy cheaper South American bushels when they come on the market.

Two: Exports ride on supplies

Exports are another critical factor. With large U.S. corn and soybean crops, ample supplies are available to the marketplace.

Corn. Year-to-date corn sales have reached 53.1% of the USDA's export estimate, the largest since the 2012-13 crop year and 39% ahead of last year’s pace. This rapid export growth is driven by:

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Soybeans: Year-to-date soybean inspections are 39.6%, 11% ahead of last year. Sales are at 63.5% of the USDA’s export estimate, consistent with last year. Increased global demand for animal protein and strong vegetable oil consumption are fueling this trend.

Three: Managed money pivots

The managed money crowd has played a pivotal role in supporting the corn market this year. After setting a record short position in July, managed money reversed course, particularly in corn. As of the Nov. 22 Commitment of Traders report:

Watch the dollar and managed money

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Together, these factors will influence grain market direction this holiday season.

If you have questions about these insights or need assistance with marketing strategies, feel free to contact me directly at 314-626-4019 or contact the AgMarket.Net team at 844-4AG-MRKT.

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