Howdy market watchers! It was a HUGE week!  

US Presidential election, Federal Reserve FOMC interest rate decision, USDA monthly WASDE and Crop Production reports and huge rains in the Southern Plains.  

In what was talked up as a closely contested election prior to voting day wasn’t as close as advertised.  President-Elect Trump managed to capture 301 Electoral college votes versus VP Harris’s 226. Trump received 50.7 percent of the popular vote versus 47.7 percent for Harris that came to a difference of 4,308,793 votes.  There was also a GOP sweep in the Senate with a 53-Republican majority versus 45-Democrats with two more races pending.  

The result of the House contest is still in progress with 218 votes needed for majority with Republicans in the lead with 213 seats currently versus the Dems 202 seats. Just as the GOP had to rethink the approach after the election in 2020, the Democrats now need to go back to the drawing board as they will need a more different and more unified message than the one they currently have in order to win favor.  

Regardless of how you feel about the result, I think we can all agree that it is good to have a clear, uncontested result so that the country, companies and communities can move forward with daily life.  

The results of the election yielded a massive rally across equity markets on Wednesday with the Dow Jones surging over 1,500 points and the S&P 500 up 144 points that saw further follow-through on Thursday and Friday to new, all-time record highs for both indices.  The CBOE VIX, a measure of market volatility, plunged below 16.0 as all markets turned to risk-on sentiments fueling one-directional trades:  BUY. 


To further aide bullish counts, the Federal Reserve’s FOMC announced a 25-basis point cut to interest rates on Thursday. This decision was also welcome news for the bulls with cheaper borrowing supporting cautious optimism as we all continue to watch the jobs and inflation data.  

The US dollar whipsawed with a surge and chart gap higher after the election followed by a selloff and inside chart day on Fed-day Thursday and then another inside day, but rebound on Friday.  However, those higher chart gaps on the US dollar index that I wrote about in the past couple of weeks have been now been filled.  The gap below from Wednesday’s bounce still remains open. 

Where to from here is everyone’s question, but anyone’s guess.  I would expect we could see some profit taking after such a large week, but optimism is alive and well.  
 

Monday marks Veteran’s Day and while markets are open, government reporting will be delayed.  We honor all our Veterans' out there that have and continue to protect our country and freedoms.

Energy markets experienced peak volatility this week with Trump’s pro-drilling policy seeing sellers active post-election with a $3.00 daily range that then found support with broader concerns over uncertainty with how Iranian crude production could be curtailed as the conflict widens.  

Part of Wednesday’s weakness was also EIA reports showing crude oil stocks rising more than expected while gasoline stocks increased rather than decreased as did distillate stocks.  Gasoline demand also came in softer than expected.  October’s CPI report will be released on November 13th and add another data layer of how the inflation fight is progressing.  While energy data was telling a story of lower demand and larger stocks, I still have concerns about inflation re-emerging with higher hopes that is has in fact been defeated and allow rates to continue heading lower. 
 

The global economic picture seems to be quite different from what seems like a more robust state of the US. However, the US is not an island when it comes to economic conditions.  Therefore, even if the US economy continues to appear and power ahead strongly, can it do so in the face of slowing economies in Asia and Europe.  Perhaps in the short-term, but unlikely for an extended period of time as factors will cause it to overheat and in turn, require more restriction to slow it and the US dollar down.  

The US dollar strength this week didn’t seem to slow down export demand for US corn and soybeans as harvest continues to get closer to completion. The US corn harvest is now 91 percent complete while soybeans harvest is 94 percent complete, both ahead of average. 

After the US election results, China bought soybeans, where we could see more purchases for delivery ahead of President Trump’s tariff talk potentially being implemented in the coming year.  US corn export sales this week were higher than expected, with soybeans at the top of expectations and wheat as expected. Egypt tendered for wheat this week with Russia and Ukraine origins being the cheapest as global prices have risen to the price floor.  

With rains in the Southern Plains, winter wheat conditions are expected to see continued improvement from this week’s 41 percent Good-to-Excellent rating after the prior week’s 38 percent G/E.  When it rains, it pours!  From a severe drought and wildfire situation, fields are now flooded with some places getting over 10 inches of rain over the last week with more chances ahead.  While we should never complain about rain, it would preferred over time instead of flash floods and flash droughts.  It will be awhile before planters get back in the field at this point.  

After recent rains in Brazil, soybean planting has had another big week of progress jumping ahead of last year and the average pace and now the fastest pace for early November.  Brazil first crop corn is progressing at the average rate and so concerns there are being mitigated.  Even so, it was a strong week for the grain markets.  

Uncertainty abounded in grains the night of the election, but all of that changed as the day session progressed on Wednesday.  Corn and soybeans continued pushing higher on Thursday. The USDA released its monthly WASDE and Crop Production reports on Friday at 11 AM.  The biggest surprise were the bullish figures for soybeans.  

The USDA cut US ending stocks for 2024/25 by 80 million bushels from last month that was also 65 million more than the trade was expecting.  US soybean yields were lowered for the first time this season from 53.1 bpa to 51.7 bpa. US corn yields were cut 0.7 bpa with ending stocks pegged right at trade expectations of 1.938 billion bushels, down from last month.  Global ending stocks for corn and soybeans both came in lower than expected.  
 

Argentine, EU and Russian wheat crops were cut, but global wheat stocks came in slightly higher as did US ending stocks.  With plentiful rain quickly curing drought across the Southern Plains, wheat futures have managed to hold relatively well although lower on the week.  We will have to see if this $5.60 level on December KC wheat holds as if not, things could get ugly.  However, I think global buying and corn strength may help to support at these levels. 

The cattle market told a tale of two this week with upward momentum expected with the stock market surge, which materialized, but then failed on Friday.  Next week will be important as any weakness in the stock market could really spell trouble for the cattle complex.  Despite stock market strength and optimism on Friday, the cattle could not hold it together.  Should we get another pop to fill chart gaps, I would advise adding protection and hedge the hedge if you’re still bullish.  If we trade below Friday levels, we could see a broader correction that could see larger liquidation until the turn of the year.  
 

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.