Trader focus is on fundamental trading inputs coming into this holiday-shortened week. The economic data calendar is light and macro indices aren't sending strong directional signals today.

Macro:

Markets have traded with a mild risk-on tone over the past week, boosted by strong China sentiment (Chinese yuan at 2yr highs vs USD) and firm energy markets.

The macro calendar is light this week ahead of the U.S. Thanksgiving holiday:

• Monday: Michigan and Pennsylvania certify Biden

• Tuesday: U.S. Consumer confidence, MN, NC, OH certify Biden

• Wednesday: Fed meeting minutes, U.S. jobless claims (watch the U.S. dollar)

• Thursday: U.S. Thanksgiving, markets closed

• Friday: Black Friday shopping, CME early close

Fund Positioning:

Friday's COT positioning report showed fund selling in grains and surprise fund selling in soybeans offset by fund buying in sugar, coffee, cocoa, bean oil, and cattle. Funds remain extended long:

• Non-comm traders are ~+927k contracts long in aggregate this morning, just below the +997k record from the October 27th COT report

• Non-comm traders have a record small gross short leg across the soy complex (chart of the week below)

• Kansas wheat, canola seed and soybean meal are the most overbought (largest z-scores)

Seasonals:

Price seasonals are mixed over the coming weeks: Positive for grains, cotton, matif rapeseed, and white sugar, negative for meats, canola seed, robusta coffee, cocoa, and oats. Peak’s full seasonal heat maps are sent to clients every Sunday evening.

Watch this week:

After a manic start to the month of November, the macro environment is more calm this week. Watch how the U.S. dollar reacts to Wednesday's Fed meeting minutes and watch if crude oil can break to new post-Covid highs this week.

Fundamentals matter this week, esp now that we're getting deeper into South American weather markets. Focus is on: Brazil precipitation (getting rains, but still dry), upcoming December deliveries, farmer selling, and China import business.

Chart of the Week: Tight global balance sheets, strong China imports, and dry South American weather means speculators don't want to be short soy futures today. Non-commercial traders have record small short bets across the soy complex today (soybeans -41k contracts short, meal -15k, bean oil -17k = -73k contracts total).

For a trial of our industry-leading agriculture research, reach out to us: insight@peaktradingresearch.com.