Wheat futures made new lows to close out the overnight session on Thursday, after weekly export sales plummeted to a disappointing low for the marketing year. The poor total – just 8.4 million bushels – dashed hopes that sales might pick up because U.S. wheat is more competitive on global markets.
Instead, no new sales were made to China and Brazil, whose stepped up purchases this year encouraged traders during the fall selling season. China had been buying soft red winter wheat, making up for problems caused by storms during its harvest. Weather problems also took a toll on the crop in Brazil, which found regular trading partner Argentina unable to export significant quantities this year as well. However, Brazil made no new purchases last week and even cancelled a small amount of its previous deals.
Winter wheat futures in Kansas City and Chicago broke November trendline support after the report came out, while Minneapolis edge to new contract lows.
Corn sales were disappointing too, totaling only 23.4 million bushels, well below trade guesses. Strong earlier purchases keep total commitments for the marketing year above the average level, and shipments were strong at 41 million. China took 56% of those shipments, though there were reports this week that another 4.4 million bushels of arrivals were cancelled due to an unapproved GMO variety. China also was the leading buyer, though most of the business was switched from deals previously allocated to "unknown destinations."
Total old and new crop soybean purchases were 42.7 million bushels, in line with trade guesses, and shipments hit 69 million bushels. USDA's figures show that 95% of its forecast of sales for the entire marketing year are already sold or shipped, increasing potential for the agency to cut its forecast of carryout in Tuesday's monthly supply and demand report.
USDA today also announced the sale of another 4 million bushels of 2014 crop soybeans to China, under its daily reporting system for large purchases.