Why Did Friday's Commodity Complex Bring to Mind Candy and Nuts?

• The US dollar index stayed strong this past week, buoyed by continued inflation and plans for interest rates hikes in the not-too-distant future. 

• It was a wild week for the Nasdaq, with the high-tech stock index still showing a gain heading down this week's homestretch. 

• The Grains sector closed mostly higher for the week, due in large part to fund activity immediately following this past Tuesday's USDA Keno game. 

Afternoon Summary: The end of another week has arrived, this one wearing the hockey mask and carrying a machete, as is tradition for a Friday the 13th. As the dust starts to settle across the market landscape we see the US dollar index up 1.11 for the week, posting its strongest weekly close (103.41) since late March 2025. Where was the support coming from? The past couple weeks have seen a bevy of market influencing activity from US Federal Open Market Committee meeting to US mid-term elections (some races not quite decided yet) and billionaires getting caught with their pants down. Regarding the latter, the CEO of Nvidia stepped down Thursday, adding to the wild week in the Nasdaq. However, despite everything the high-tech stock index is still up 535 points for the week (heading toward the last half hour of Friday’s session). The Nasdaq has acted a lot like natural gas recently. Enough said. Speaking of Energies, the sector’s markets were lower across the board late Friday afternoon. It will be interesting to see what the US president says, or does, over the weekend since his name has been dropped from most headlines recently, replaced by Mr. Huang, formerly of Nvidia. 

Corn: I had to take a second look at corn’s initial trade volume numbers Friday afternoon. What jumped out at me was December registered roughly 246,000 contracts changing hands while March was showing 222,220 contracts. While not huge, as compared to what we tend to see when USDA is playing Keno, it is solid for a mid-November Friday. The December issue gained as much as 7.75 cents before closing 3.0 cents higher for the day while March added as much as 7.5 cents and settled 2.0 cents in the green. One more contract out find May up 1.25 cents for the day. At face value, the change in spreads indicates commercial buying provided support to close out the week. This is possible given roughly two-thirds of the crop has been tucked away in on-farm storage at this point. The Dec-March futures spread covered 38% calculated full commercial carry with the March-May at 34% and the May-July 32%. Last Friday’s settlement saw these same spreads cover 46%, 39%, and 37% respectively. As for futures contracts, December was up 4.0 cents for the week, March is showing a gain of 1.5 cents, May was 0.5 cent in the green, and July finished 0.5 cent lower for the week. 

Soybeans: The soybean market was active Friday. The day began with a strong overnight rally, hinting at some export sales being made to Eastern Hemisphere buyers. USDA obliged by announcing sales of 134,000 mt to China, 120,000 mt to Vietnam, and 100,000 mt to unknown destinations, all for the 2026-27 marketing year. As Friday played out, the January issue gained as much as 21.75 cents on light trade volume of 105,000 contracts before closing with a daily gain of 12.5 cents. This put its weekly rally at 37.75 cents, due in large part to the post-USDA Keno game jump of 39.75 cents this past Tuesday. (It’s interesting to note that if not for USDA, January soybeans would’ve posted a sixth consecutive lower weekly close). As the only saying goes, though, “If ifs and buts were candy and nuts, every day would be Christmas”. Soybeans are actually more interesting fundamentally. The Jan-March spread covered a bullish 21.5% calculated full commercial carry at Friday’s close with the March-May covering 24.5% and the May-July 20%. Last Friday’s settlement saw these same spreads cover 21%, 31%, and 26% meaning commercial interesting were providing support this past week. We’ve also seen this in basis, as we wait for Friday’s National Soybean Index. 

Wheat: The wheat sub-sector closed in the green Friday, with the question being were gains enough to stop the 10-week string of lower weekly closes in both winter markets. The March SRW issue finished the day 7.5 cents higher putting the weekly change at – drumroll please – a gain of 4.0 cents! (Huzzahs and Hallelujahs all around. The market gained 4.0 cents after losing $2.0050 based on weekly closes the past 10 weeks.) Additionally, March gained 0.25 cent on May, the spread covering 33% calculated full commercial carry versus last Friday’s settlement of 34.5%. Over in HRW we see the March issue up 5.0 cents for the day, putting its weekly change at – another drumroll please – a loss of 2.5 cents (sad trombone sound) meaning March extended its weekly close slide to 11 weeks and $2.1950. (For the record, that’s a drop of 25.6%.) Meanwhile, the March-May spread covered a bullish 19% as compared to last Friday’s 18%. Go figure. As for HRS, the March issue settled 3.0 cents higher for the day and – last drumroll, I promise – 10.75 cents higher for the week. As for new-crop winter markets, the July SRW closed 2.25 cents higher for the week while the same issue in HRW was down 1.5 cents.  

Livestock: It was an interesting final day of an interesting week in the Livestock sector. A look at the quote screen and we see noncommercial buying provided support in all three major markets. Setting December live cattle and lean hogs, as well as November feeder cattle aside due to their tie to cash markets, nearby contracts lost ground to deferred issues at least with the next spread out. For example, Feb live cattle closed $1.85 higher but lost $0.10 to April. It was a similar story in feeders where January finished with a gain of $3.675 but lost $0.10 to March. As for lean hogs, the February issue settled $0.375 in the green but lost $1.30 to April. What’s happening? The sector is seeing renewed noncommercial buying interest despite weakening cash markets. (The asterisk this week goes to feeder cattle, where because of the beauty of averages, cash indexes jumped mightily Friday morning.) For the week, February live cattle was up $7.725 while April showed a gain of $8.05 (note the weekly change in the spread). January feeder cattle finished $17.275 higher for the week while March was up $18.20 (again, the nearby lost ground to the deferred). February lean hogs closed $2.675 higher with April up $2.00.