Last week we briefly touched on the third-quarter results of the investment bank Goldman Sachs, aka Giant Vampire Squid, which far exceeded expectations. 17.5% compared with the 13% projected at the beginning of this year. No doubt, they achieved this type of return through a number of measures, but regardless if you like or dislike this firm, there would seem to be no question they have consistently produced solid returns because they have done their homework and executed their plans well. I am certainly not bringing this up as a promo or puff piece heralding Goldman’s skills, but rather it is a good lead into the commodity update they published yesterday. In short, they are bullish commodities for 2021. They now project the sector will generate a 28% return this coming year. Do recognize that even if they are correct, that will just lift their commodity index back to levels that it was trading at in 2018, but I think few would squawk about such a swing. There is one little caveat to point out in their assessment, though, for we in the ag industry. They predict that within the group, precious metals will increase 17.9%, energies a whopping 42.6%, industrial metals, 5.5% but for the ag sector; a negative .8%. Obviously, they do not adhere to the belief that a rising tide will lift all the boats.
Ho Hum, another week of good export sales for corn and beans. Like the spoiled child who always gets what they want, has the trade now come to expect, rather than celebrate these numbers. If that is the case, we may be headed for an unpleasant reaction. Nevertheless, for the week ending October 15th, we sold 1,831,600 MT or 67.3 million bushels of corn. Japan was the top customer purchasing 490.1k MT, followed by China with 433.5k, and then Mexico taking 377.4k. Beans sales slipped a smidge from the previous week but were still massive at 2,225,500 MT or 81.8 million bushels. 55% of these or 1.222 MMT were to China, with the number two and three spots going to Egypt and Germany with 194.4k MT and 111.3k, respectively. Wheat sales were within the range of estimates but still a bit sluggish at 367,500 MT or 13.5 million bushels. Mexico was the top buyer with 192.8k MT, followed by Nigeria taking 60.6k and then the Philippines with 60k. Looking at other commodities, we find China purchasing 195.8k MT of sorghum, 20k MT of soymeal, 11,000 MT of soy oil, 47,500 RB of cotton, 407,400 whole cattle hides, 3,700 MT of beef, and 1,800 MT of pork.
Looking at the macros this morning, we find energies higher, metals under pressure, equities flat, and the dollar is rebounding.
