If a casual observer were to look at a chart of the price action of corn or beans yesterday, the initial impression would probably be, “Eh, looks like little more than follow-through selling after price reversed from the prior day’s highs.” While that would undoubtedly be correct, it would really belie the volatility that took place to make that happen. However, if you glance at a 5-minute chart for July corn, you find a better representation of what really happened throughout the day. After a relatively benign overnight session, prices turned higher at the morning break (outside higher reversal) and then went on to advance over 24-cents by 11:30. From there, we turned back down (outside reversal lower) and, by the close at 1:15, had lost 34-cents and finished lower for the day. Seemingly a day-traders delight, but no doubt, it had more than a few reaching for the bottle of antacids. Interestingly enough, the range for July beans throughout that time frame was not much larger than corn. The volatility appears to have subsided some into this morning, but the biggest feature now the continued bull spreading between for both corn and beans. Since the early April swoon, July corn has gained 50-cents over December futures and July beans have advanced 65-cents against the November.
Sales for both corn and bean rebounded this past week, but understandably remain well off of the fevered pace of earlier this year. For the week ending April 22nd, we sold 292,500 MT or 10.7 million bushels of current crop year soybeans. Mexico was atop of the leader board with 115.3k MT, followed by China purchasing 62.5k, and then Egypt with 51.9k. For the 21/22 crop year there were sales of 439,000 MT or 16.1 million bushels. China accounted for 45% of these sales with unknown destinations taking 42%. Old crop corn sales totaled 521,300 MT or 20.5 million bushels. Here as well we find Mexico in the top spot with 296.9k MT, followed by South Korea taking 117.1k and then Saudi Arabia in for 89.2k. For new crop there were sales of 553,400 MT or 21.8 million bushels. Unknown destinations accounted for 65% of these. Old crop wheat sales slipped a bit from last week but we still 73% above the 4-week average at 223,600 MT or 8.2 million bushels. Making it a trifecta for the week, Mexico was the top purchaser here as well with 65.4k MT, followed by Indonesia at 58.3k and Yemen in for 52.2k. For the 21/22 season there were sales of 237,700 MT or 8.7 million bushels. The top three buyers were the Philippines, 92.5k, Mexico, 54.8k, and Honduras with 29k. Looking over at the meats, beef sales were down 4% for the week but still 22% higher than the 4-week average at 23,600 MT. China purchased 1,900 MT. Considering that last week pork set a marketing-year low with a net negative figure, most anything would look better and we did outpace the 4-week average by 59% with sales of 35,600 MT. The largest sales were to Mexico, Japan and South Korea but China was there for 2,000 MT.
We have several pieces of economic data released this morning. Weekly initial jobless claims slipped another 13,000 to 553,000, which was not as low as expected. The advance 1stquarter GDP came through at an annualized 6.4% growth, which is just a smidge below the expected 6.5%. Advanced Retail Sales for the first quarter grew by 9.2% and the Advanced Personal Consumption figure, which of course reflects the largest part of the economy, grew at its fastest quarterly rate since the 1960’s, posting an increase of 10.7%. It would appear that all the pent-up demand from lockdown along with the stimulus checks have been put to use. As expected, inflation also picked up some steam in the first quarter with the Personal Consumption Expenditures Price Index (PCI) increasing by 3.5% and the Core PCE index increasing 2.3%. By no means did it hurt that Fed Chairman Jerome Powell offered a few encouraging words yesterday and told everyone they have no intention of pulling back in the bond-buying program for now, and combined, all of this was enough to lift the S&P 500 into new record highs once again.
