USDA released their weekly crop progress tonight, pegging US corn harvest at 92% complete vs. last week harvest of 88%. Traders were expecting the harvest to be between 90 to 94% complete. Current estimates show northern Illinois at 87% completed, with western Illinois being furthest behind at 78% complete. Grain prices rose on the Chicago Board of Trade after a bullish research note from Deutsche Bank said agriculture futures are poised to rise sharply in the coming months.
Investors waded back into most other commodities as the dollar weakened, making them less expensive for foreign buyers. A nine-month rally in commodities came to a halt this month as investors book some profits and question how long the dollar will remain weak. The Federal Reserve has kept interest rates near zero this year, weakening the dollar and making assets like stocks and commodities more attractive to investors. As the economy shows signs of strength, investors are worried that the Federal Reserve may raise interest rates sooner than expected and potentially upend the rally in commodities.
The Fed meets this week for its final policy meeting of the year. The central bank is widely expected to leave rates unchanged, but investors are anxious for any more insight on the timing of a future rate hike.
~Chris Spurlock
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