After getting off to a bit of a rocky start, it would appear this will not have turned out as too bad of a week for the grain/soy market bulls. If we were to wrap up trade right now, beans would still be in the negative column, down around 22-cents but on the rebound. Corn has now made it back to just 4-cents lower for the week, after trading down as much as 26-cents at midweek, and wheat is now a penny better for the week. I should also point out that oats, which I commented on a few days ago, have also recovered sharply. While we have not reached back to their highs, they are now up around 6-cents for the week and on track to record another record high weekly close. While there is no question that several of these markets had reached into oversold positions this week and were due for a rebound, but the action is also a stark reminder that the overall commodity bull market of 2020/21 is not dead, as is visually apparent on this GSCI chart. Undoubtedly, some commodities’ performance is directly related to supply-chain issues, which will be discussed a bit more in the weekly letter, but again reinforces the adage that a rising tide will still tend to lift all boats, of course, unless that have gaping holes in the hull.
It was worth waiting the extra day as weekly export sales turned out to be respectable all around, albeit in line with expectations. For the week ending October 7th, we sold 567,600 MT or 20.8 million bushels of wheat. This was 70% higher than last week and 48% above the 4-week average. The top purchasers were the Philippines taking 142k MT, followed by Mexico, in for 127.8k, and then Taiwan with 49.6k. Corn sales slipped 18% from the previous week but were still solid at 1,039,900 MT or 40.9 million bushels. Here as well, we find Mexico leading the way with 790.2k MT (76% of the total), followed by Guatemala taking 102.6k and then Japan for 70.4k. While pretty consistent with recent weeks, bean sales were 10% higher than last week at 1,147,800 MT or 42.2 million bushels. There is no surprise to see China at the top of the list buying 640k MT, followed by Mexico for 273.8k, and then Egypt taking 102.5k. In addition to this, in the daily system, the USDA reported sales of 132k MT of beans to China, 396k to unknown destinations, and 326k as received during the reporting period for unknown. Beef sales were 1% higher at 15,700 MT, and pork sales jumped more than 50% to 33,500 MT. The largest buyers of pork were Japan and Mexico, but China did return for 4,300 MT.
On the economic scene, Advance Retail Sales for September came in at +.7%, compared with an anticipated -.2%. If Autos were excluded, the number improved to .8%. Interestingly enough, these better numbers do not appear to be reflected in consumer attitudes. For October, the University of Michigan Consumer Sentiment slipped again, coming in at 71.4, compared with 72.8 last month and an expected 73.
In the macros this morning, we find energies higher, gold under heavy pressure, financial instrument lower, the dollar flat to week, and equities following through higher after yesterday’s strong performance. If we closed right now, the dollar would be down just 20 points for the week and the DJIA up 450 points, and the S&P 500 up more than 80.