By G C Mays
The USDA released its export sales report for the period November 3-November 9, 2017. Declining sales were sweeping, affecting wheat, corn, and soybeans (SOYB).
Wheat export sales slumped more than 37 percent during the week to 489,300 metric tons. There were orders for 54,800 metric tons cancelled. The lion's share of the cancellations came from the Philippines (20,000) and Mexico (30,100).
December wheat futures continue to move in lock step with cash prices during the week. Both futures and cash prices ended the week up $0.0325 cents or 0.7 percent. The Teucrium Wheat ETF (WEAT) dropped $0.03 per share over the same period. As discussed last week, the divergence between the Teucrium Wheat Fund and the current December futures contract is because the December wheat futures contract is no longer part of the ETF's portfolio. Correlation with futures will increase as the December wheat contract moves closer to its end.
Lower prices were of no help to corn as export sales crashed, sliding by nearly 60% to 949,500. As discussed in my November corn analysis entitled, "Corn Production Forecasted Higher In U.S. As Competition For Asian Demand Heats Up," 57 percent of net corn sales came from Japan.
Corn futures dropped 1.9% during the week, closing at $3.4150 per bushel. Cash prices were also lower, falling by 2.1%, 1.9%, and 0.8% at export terminals in Chicago, the Gulf, and Toledo, respectively. The Teucrium Corn ETF (CORN) closed down 1.85%.
Compared to the grains, the decline in soybean sales were slight, falling 4.8 percent to 1.104 million metric tons. Nothing unexpected here as China continues to drive soybean sales with net orders of 1.11 million metric tons, which included 571,000 tons switched from previously unknown destinations. Accumulated net sales continue in the flat to slightly down range year-over-year, keeping prices stable, in my opinion.
Soybean futures were down marginally, with the January contract losing $0.02 from the previous week's close.
Cash prices at key export terminals were also lower. Cash prices in Toledo and Gulf were down the most, losing $0.09 and $0.06 cents, respectively. Cash prices in Chicago lost $0.04 cents to close at $9.50 per bushel.
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