Free Commentary

It is not even quite August yet, and it already feels like the “dog days of summer.”  Of course, on a typical year, many would be preoccupied with squeezing in one final vacation and finalizing back to school plans. For some, this year, the vacation choice is limited to either the front or back yard, and back to school planning could be just to determine which room of the house will have the computer set up in.

At least we have export sales to chew on this morning, but not all of them taste very good.  For the week ending July 23rd, old crop corn sales set a marketing-year low of just 29,300 MT or 1.15 million bushels.  New crop sales helped pick up some the slack though at 638,700 MT or 25.15 million bushels.  Of course, this is a far cry from the over 2.3 MMT we sold during the previous week, but with China absent from the list, not a shock.  The largest sales were to unknown destinations of 245.9k MT, followed by Mexico for 112k and then Japan with 100k.  Taking part of the sting out of this bite, in the daily system, the USDA also reported this morning a sale of 1,937,000 MT or 76.3 million bushels of corn to China and an additional 130,000 to unknown destinations, all for the 2020/21 crop year.  It is also worth noting that 100% of the corn offered by the Chinese government in the weekly auction was again snapped up.  This included 89.5k MT of 2014 “vintage” and 3,924,835 MT of 2015 “vintage.” Unlike wine, where the older vintages will often sell at a premium, old corn did not bring as much and sold for 166 yuan per tonne less.

Old crop bean sales also slipped, coming in at 257,800 MT or 9.47 million bushels but new crop more than made up for it.  For the 2020/21 crop year, we sold 3,344,200 MT or 122.9 million bushels.  China and unknown destinations made up 96% of these with 1.989 MMT and 1.3239 MMT purchases, respectively, with Mexico occupying the third-place spot with 64.8k.

Wheat sales were 10% higher than the previous week at 676,600 MT or 24.8 million bushels.  The Philippines purchased 132.4k MT, followed by Taiwan with 102.8 and then Brazil for 62.1k.  During the week, China was also a purchaser of 71.4k MT of sorghum, 22,100 RB of cotton, 343,100 whole cattle hides, 1,400 MT of beef, and 17,800 MT of pork.

Outside of this, the majority of the news this morning centers on the economy, and as you might expect, none of it good.  Weekly jobless claims increased for a second week in a row, climbing 12,000 from the prior week to 1.434 million.  The 2nd quarter Advanced Retail Sales were -29.3%, and Advanced Personal Consumption was -34.6%.  The Advanced, PCE Price Index came in at -1.9%, and last but not least, the second quarter Advanced GDP registered a -32.9%.  That final number was not as weak as the expected -34.7% but still set the worst post-WW II performance.  The previous low water mark was set in during the first quarter of 1958 at -10%.   Equity markets did not take kindly to the news.