Suppose you had decided to turn off your market updates after Tuesday, assuming that the bullish USDA number had provided enough stimulus to keep the bulls in control for an indefinite period. In that case, you might be a bit surprised to find where we are sitting today. If we wrapped up trade for the week right now, corn would be just 2-cents higher and 20-cents down from the week’s high. Wheat, which really did not have outright bullish news, is down 16-cents for the week and on track to record the lowest weekly close in over a month. Beans have fared better than the other two as we sit 46-cents higher, but even then, we are only 3-cents better than the close on the report day. While there is nothing terribly alarming about any of this, it would seem to suggest that we are dealing with pretty weary bulls who are going to need a steady diet of positive news to keep this advance alive.
Those expecting that to come from this week’s export sales report, I am afraid they will be disappointed. For the week ending November 5th, beans sales set a marketing-year low of 1,468,500 MT or 53.97 million bushels. Granted, in any given year, this would still be a rather solid number, but this year, that was 4% below the previous week and 26% below the 4-week average. As usual, China was the big dog taking 745.6k MT, followed by Thailand with 92k and then Vietnam at 89.5k. We have a similar scenario with corn as sales of 978,300 MT, or 38.5 million bushels, is by no means terrible, but they were 63% below last week and 47% under the 4-week average. Unknown destinations took the top spot with 260.6k MT, followed by Mexico at 258.6k and then South Korea with 128.1k. At 300,500 MT or 11.04 million bushels, wheat sales were 50% below the previous week and 46% below the 4-week average. Guatemala was the best buyer taking 92.5k MT, followed by Japan with 55.8k and then El Salvador at 35.7k. Perusing through the rest of the report, we find China purchasing 245,200 MT of sorghum, 31,300 RB of cotton, 249,000 whole cattle hides, 3,500 MT of beef, and 21,100 MT of pork.
We do have a couple of economic releases this morning. The October Producer Price Index increased .3%, which was .1% more than expected. Obviously, rising food and energy prices are filtering in as when those are stripped away, the increase was only .1%, versus the expected .2% increase. Personal consumption increased .3% for the month. Equity markets are on track to close higher for the week, but not unlike the action in beans and corn, failed to sustain the enthusiasm witnessed several days ago. That said, if we hold, this will be the highest ever weekly close for the S&P 500, but one has to suspect that with the election all be decided now and more and more areas rapidly beginning to reinstate Covid related restrictions, it will be challenging to keep that optimism alive much longer.
