Free Commentary

We find little that could be deemed inspiring in the weekly export sales report.  We might as well begin with wheat as that has been the price leader for the past couple of weeks and sales for the week ending the 21st slipped 26% from the prior week, coming through at 269,300 MT or 9.9 million bushels.  This was also 31% below the 4-week average.  Mexico was the top buyer with 140.8k MT, followed by Ecuador, taking 24.7k, and then Honduras in for 22.6k.  Corn sales slipped back below the 1 million mark, coming through at 890,400 MT or 35 million bushels.  This was 30% below last week and was 10% under the 4-week average.  Here as well, we find Mexico at the top of the list with 492.9k MT, followed by Japan taking 193.6k and then Colombia purchasing 100.5k.  Beans sales were still above 1 million but missed even the lowest estimates, coming in at a net 1,183,400 MT or 43.5 million bushels.  If you took a wild guess that China was the largest buyer, you would be correct in spade.  They purchased 1,081,000 MT or 92% of the total.  Next in line was the Netherlands with 117.8k MT and then Mexico stepping up for 93.9k, but there were reductions of 469.3k MT from unknown destinations.  Meat sales rebounded last week as we sold 19,200 MT of beef and 29,500 MT of pork.

IKAR has made a slight upward adjustment for Russian wheat production this year.  They now estimate that crop will come in between 75 and 75.6 MMT, versus their previous estimate of 74.5 to 75.5. They kept the export estimate at 31.5 to 32 MMT. Weather conditions have been relatively dry in the Black Sea region for the past several weeks, heightening concerns about winter crops.

It would appear that the upper Midwest will be contending with storms for another day or so, but the outlook for improved harvest weather next week looks promising.

On the economic front, this morning, we saw the release of several 3rd quarter results.  The Advance GDP for the period came through at a disappointing 2% growth.  This compares with an expected 2.8% increase and the 2nd quarter growth of 6.7%.  The Advanced, Chain-Weight Price Index was 2/10th above expectations at 5.7% but dropped from 6.1% in the 2nd quarter.  The Advance PCE Prices Index slid to 4.5% from 6.5% in the 2nd quarter. Advanced Personal Consumption dropped to just 1.6% from 12% previously, and Advanced Real Final Sales were a disappointing -.1% compared to 8.1% in the 2nd quarter.  It would appear that inflation and covid fears have come home to roost.  Finally, there was a bit of good news as weekly initial jobless claims dropped another 10,000 to 281,000.

In the macro trade this morning, we find energies soft, metal higher, financial instruments weak, the dollar lower, and equities strong.  I guess I should not be adding Bitcoin to this mix.  Bitcoin futures are higher this morning after a couple of days of setbacks.