November 23, 2022

• Mixed Economic News Kept Markets Busy
• Winter Weather Could Impact Crop

December futures are all but gone after today, with traders having changed their positions from the December contract to March. March futures will now be the central focus after First Notice Day and the shortened trading week due to Thanksgiving. Futures traded in a wide range throughout the week, with outside markets, Covid fears in China, and the seemingly always present concern of demand keeping the market volatile. March futures closed limit down on Monday and attempted to make up for the losses to end the week. For the week ending November 23, March futures closed at 82.90 cents per pound, down 238 points since last Thursday. Total open interest continued downward decreasing 4,165 contracts, finishing the week at 191,947. 

Outside Markets

Outside markets had a busy week with the release of mixed economic news. Stocks were trending up compared to last week, with home sales rising in October, consumer sentiment also rising, and the anticipation of the FOMC minutes getting released helping keep them up. Upon release, the minutes showed an uncertain outlook for raising interest rates at the current pace and hinted that the hikes could slow soon. On the bearish side, weekly unemployment claims rose to 240,000, a sign the labor market could be weakening. China has also reported the highest number of Covid infections in almost seven months, which could increase Covid restrictions in the country again. The Dollar Index was down from the various economic news received this week, helping boost commodities.

Crop Progress and Weather

After seeing little precipitation recently, the Panhandle and Southern High Plains of Texas are bracing for snow this coming weekend. With Texas being 71% harvested, the possibility of upcoming moisture could slow progress as farmers try to get cotton out of the fields. Although producers are rushing to get the crop out of the field, the quality of cotton remaining could be impacted. The rest of the Cotton Belt will see colder temperatures and precipitation in the coming week. The U.S. has currently harvested 79% of the cotton crop, staying above the five-year average of 71% typically seen at this point in the year.

The Week Ahead

With the holiday passing, normal business will resume next week. All eyes will now be on March futures and the usual reports will be released on the typical schedule. From a fundamental perspective, traders will be keeping their eyes on daily classing reports, crop progress, and the Export Sales Report. Continuing monitoring of macroeconomic data will also be a point of focus.

We hope all our readers enjoy the holiday with heartfelt thanks, good food, great fellowship, and safe travels. Happy Thanksgiving!

In the Week Ahead:

• Friday at 7:30 a.m. Central – Export Sales Report
• Friday at 2:30 p.m. Central – Cotton On-Call
• Monday at 2:30 p.m. Central – Commitments of Traders
• Monday at 3:00 p.m. Central – Crop Progress and Condition