If you ever wondered why politicians get a bad rap for trustworthiness or better stated lack thereof (probably a silly question) look no further than the backroom deals that we cut over the past couple days in Washington concerning the budget. With no one on the Ag committees being consulted and little to no explanation as to the language, the White House, and House leadership gutted funding for the crop insurance program rendering the 2014 Farm Bill a near meaningless piece of legislation. Members of the Ag committees as well as a number of farm state legislators have already been at work in an effort to strip out the cut to the crop insurance program, which is a testament to the efforts of many of you who raised objections personally and/or through member organizations.
A very interesting change occurred overnight; China revised its birthing policy and will now allow families to have two children instead of just one. Back in 1980, that nation adopted the one child policy in an effort to achieve zero population growth. This was at times carried out with ruthless enforcement and at one time swelled the number of girls being left in orphanages but they did achieve their goal and in fact have been experiencing negative population growth. The net result though is that they are faced with a rapidly aging population with fewer and fewer people entering the workforce to help support the aged. Granted, the United States, much of Europe and Japan are or are going to be confronting similar situations but evidently China has now decided to do something about it. Realistically of course, there will not be an immediate impact with this change but longer-term it has to be viewed as positive for the commodity trade and fits into the overall 30 year commodity cycle quite well.
As it turns out, we have positive news all around for export sales and once again the numbers are outstanding for soybeans. For this commodity we sold an additional 2,087,400 MT or 76.71 million bushels. This figure is 8% above last week and 19% above the 4-week average. This now brings total sales up to 27,277,000 MT or 1.002 billion bushels, which still lags the pace set last year by 20% but now stands at 60% of the projection for the year with 45 weeks left to go. As you would expect, China was the top purchaser with 1.411 MMT, followed by Germany taking 190.5k MT and Mexico for 146.1k MT. Corn sales were 2.8 times greater than last week coming through at 708,800 MT or 27.91 million bushels. Top purchasers were Mexico taking 300k MT, Colombia with 160.9k and Peru for 104.7k. While it is encouraging to see a step in the right direction we have our work cut out for us as the tally for year to date stands at 12,589,000 MT or 495,600,000 bushels out of a projected 1.850 billion. The weekly average needs to step up to 764.5k MT per week. The largest sale so far for the marketing year has been 748k. Wheat sales also recorded a positive bounce coming in at 550,300 MT or 20.2 million bushels. This number was up 54% from the previous week and 86% above the 4-week average. Top buyers were South Korea with 96.5k MT, the Philippines with 91.6k and Thailand taking 75.8k. For the marketing year to date we have sold 12,750,000 MT or 468.5 million bushels bring us to 55% of the projected 850 million. With 31 weeks left in the year, we will need to average 12.3 million per week.After struggling in the overnight hours, prices have shored up across all three markets but we suspect we shall see little more than sideways trade as we finish out the week/month