Free Commentary

We have an abbreviated morning comment today.  For a more in-depth look at the overall commodity outlook, watch for the weekly newsletter.

While corn sales fell sharply in the past week, the global, and particularly Chinese appetite for beans, is seemingly insatiable.  For the week ending October 8th, the USDA reports sales of 2,631,300 MT or 96.7 million bushels of beans.  The Chinese share of the purchases was slightly higher than normal, taking 60% of 1.592 MMT, followed by Mexico with 210.4k MT and then Germany with 115.7k. Corn sales were within the expected range, but at 655,200 MT or 25.8 million bushels, they were 47% below last week and 67% below the 4-week average.  Here we found Mexico purchasing 203.8k MT, followed by Colombia with 184.2k, and Japan took 175.8k.  Wheat sales were virtually unchanged for the week, coming through at 528,500 MT or 19.4 million bushels.  This was 23% above the 4-week average.  As with corn, Mexico was the lead buyer with 229k MT, followed by Japan at 62.2k and then China with 57.4k.  China was also a purchaser of 229,400 whole cattle hides and 5,200 MT of pork.  Keep in mind, they were on the National Holiday last week.

This was by no means the final word on sales this week.  In the daily system, the USDA reported sales of 128,000 MT of corn to Mexico, 175,000 MT of beans to unknown destinations, and 216,150 MT of beans to unknown classified as received during the reporting period.

We also have a few economic releases to cover this morning.  First the positive news.  The University of Michigan preliminary Consumer Sentiment for October registered at 81.2, which is up from 80.4 in September.  This would appear to be reflected in the September advance retail sales, which were up 1.9% for the month.  Granted, this would not suggest shoppers were fighting to get into stores, particularly considering in a normal year there would have been quite a bit of “back to school” shopping, but it was better than the .6% increase in August.  Falling under the less than stellar header, we find September Industrial Production which came through at a negative .6% compared with an expected positive .5% and US Capacity Utilization was 71.5%, versus the expected 71.8%.  Equity markets appear to approve of it all, as we are higher today and the S&P 500 is on track to match the record-high close set at the end of August.