Traders sometimes like to dismiss USDA’s weekly export sales report, arguing the data is like looking in the rearview mirror: It tells you where demand has been, not where it’s going.
That theory could get a test this morning, on the heels of sales numbers that were generally disappointing across the board. Bulls could ignore the data, focusing on the broad move higher in outside markets. Otherwise, Wednesday’s demand worries could resurface to dog the rally.
The most glaring numbers came in the corn market. USDA reported only 14.2 million bushels of new sales in the week ending Oct. 20, less than half trade guesses and just a fifth of the previous week’s huge numbers. Japan and Mexico were the primary buyers, though China also picked up a load. Shipments fared a little better at 26.7 million, but that was still well below the weekly rate forecast by USDA for the rest of the marketing year.
News emerged yesterday that Japan, the biggest importer of corn and normally a reliable U.S. customer, had booked a load from Ukraine, where production is up. Rumors had the total size of the deal up to 10 cargoes, almost 20 million bushels, with active feed wheat buying around the world also denting U.S. export hopes.
Soybean sales were also lackluster, at just 9.4 million bushels, compared to trade hopes for almost 30 million. Mexico was actually the largest buyer, beating out China, which has been slow to shift purchases back to the U.S. due to poor processor margins there. China has been shipping out previous purchases, however, with shipments at 41.9 million bushels.
Wheat sales of 11.6 million were 1 million less than the rate forecast by USDA for the rest of the marketing year, and more than 3 million below modest trade guesses. Still, both sales and shipments are running ahead of USDA’s forecasts. Mexico was the biggest buyer, though most other customers just took small amounts.
For the complete export report, click here.