A one-two punch is pummeling the grain market again today, with weak export sales data adding to outside market pressure caused by very dismal employment numbers for May.
The U.S. economy added only 69,000 jobs last month, less than half the number expected, sending the unemployment rate up a notch to 8.2%. Stock index futures, which were already down sharply on bad data out of Europe and China, compounded losses, which spilled over into the grain market.
Soybean futures suffered the worst, due to a strong correlation with financial markets of late. As bean losses approached 20 cents a bushel, sellers also pushed corn and wheat lower.
The grain market had its own problems to contend with. Corn exports in the latest week totaled just 11.1 million bushels, barely half trade expectations. While China took 5.6 million bushels of old crop, 2.4 million bushels of those were switched from previously reported deals to unknown destinations. China also took 2.2 million bushels of new crop, though overall business for the fall was also sluggish. As previously reported in the inspections tally Monday, China led the list of shippers, taking 12.5 million bushels.
Traders had anticipated a drop in soybean business, but the decline was also greater than expected. Old crop sales came in at 8.8 million bushels, but only 6.5 million bushels of new crop business was done. While new crop sales to date are a record, Chinese buying slowed.
Wheat sales of 12.2 million bushels were also a bit disappointing. Old crop totals were negative as purchases shifted to the 2012 crop marketing year, which starts today. A big chunk of old crop previously sold to unknown destinations, 7.1 million bushels, was also cancelled. New crop sales, including 12 million this week, are off to an average start based on previous commitments.