You generally would not expect commodity traders to be a shy lot, but they seem to be just a bit hesitant this week as far as pushing into higher ground. It is not that they have entirely shirked away from doing so, as corn, beans, and wheat have marched right up to the stoop that leads to the next floor, but so far, at least, none have chosen to step through. It could be they are distracted by the upcoming holidays, worried that gift that is on backorder will not arrive in time, or maybe they are hoping for the place in line to receive the vaccine, as you never know what could be on the other side of that door. Regardless, we shall have to remain patient a bit more to see if they find the right incentive to make that next step.
Weekly export sales should help some, and by unanimous vote, the award for outstanding number goes to corn. For the week ending December 10th, we sold 1,924,500 MT or 75.8 million bushels. Mexico was the star purchasers with 714.9k MT, followed by unknown destinations taking 402.3k, and then China for 231.8k. While small, there were also sales of 10k MT to Japan for the next crop year. Beans sales snapped back nicely with a total of 922,300 MT or 33.9 million bushels. This was 62% above the previous week and 20 % better than the 4-week average. China was in for 919.7k MT, followed by Mexico with 225.3k and then Indonesia at 105.6k, but reductions from unknown destinations totaling 817k partially offset these. There were also sales of 94k MT for new crop. Wheat sales slipped 12% for the week but were still not bad at 540,400 MT or 19.9 million bushels. Mexico was the top purchaser with 540.4k MT, followed by Japan at 85.2 and then South Korea with 78.1. China was also a purchaser of 68.3k MT of wheat, 325.9k MT of sorghum, 225.8k RB of cotton, 137,900 whole cattle hides, 700 MT of beef, and 11,600 MT of pork. Do note that the USDA did announce this morning that weekly sales will be released on Wednesday next week.
U.S. pork continues to be a hotly debated topic in Taiwan. As we reported several weeks back, the President of the island nation decided to allow the import of U.S. pork, which could have been fed ractopamine, setting off a number of protests in opposition. I read that there was even an instance at a protest where the opposition was hurling pig guts at members of parliament. There was no word if they included recipes for chitlins or not.
While I do not imagine the threat of losing Chinese corn business to China is major, but obviously, there are some in Brazil that have their sights set on increasing their share. The two nations are currently in negotiations on an agreement that would be sending more Brazilian corn and other feed grains to China. Obviously, no one has warned the authorities in Brazil about the risks of having too many eggs in one basket, or possibly as would be typical for most politicians, they may not care as they would be an issue someone else would be left to deal with.
Looking at the macros this morning, we find gold and silver sharply higher, energies firm, financial instrument and equity markets higher, and the dollar diving into lower lows yet again. Here again, your viewing enjoyment is the dollar versus commodity index chart and the inverse relationship continues to hold consistent.
