What a difference a week makes. Or, in the case of today's export sales report, a different set of expectations from outside markets.
Last week's export sales tally from USDA was disappointing to say the least. But the market was also overwhelmed by a weak employment report for May that punished markets across the spectrum with a wave of selling.
Today the economic news is better. Weekly unemployment claims fell, China cut interest rates for the first time in four years to stimulate its economy, and Europe edged closer to solving its financial problems. Export sales were still disappointing, but that doesn't seem to be affecting the futures market one bit.
While China shipped out a lot of corn in the latest week – 8.3 million bushels in all – there again was no confirmation of any major new purchases, as rumored last week. Old crop sales to China totaled just 732,375 bushels, with 551,250 million bushels of previous new crop purchases cancelled. Total sales to all comers in the week were 15.6 million bushels, only slightly above the previous week and well below expectations. Sluggish shipments continue to suggest the export market is rationing supply through strong basis up the river system from the Gulf.
Soybean sales were better at 18.2 million bushels, keeping total commitments above the rate needed to reach USDA's forecast for the marketing year. Still, the trade expected more new deals. China bought only one cargo of old crop beans, though it added at least two this week, according to a separate announcement by USDA yesterday.
Wheat began its new marketing year with just 6.1 million bushels of sales, with regular customers just taking small amounts. Carryover sales from 2011 were around 48 million bushels, 29% less than a year ago.