Hopes for brisk business in wheat and soybean exports were dashed this morning by USDA's latest update of weekly sales. New deals slowed to a crawl during the holiday shortened week, as turbulent financial markets continue to have buyers taking cargos on a hand-to-mouth basis.
Sales for both wheat and soybeans hit marketing year lows, while corn sales were also dismal. Sales do appear to be picking up some this week, at least for corn, while other buyers remain wary.
Total wheat sales came in at just 7.6 million bushels, with Japan remaining a very slow buyer this year. Wheat sales are still above the pace forecast by USDA for the marketing year, but could use a shot in the arm as the second half of the marketing year gets underway.
Historically weak ocean freight rates appear to be cutting both ways. They're giving buyers access to grain from areas that previously might have been uncompetitive, such as the Black Sea. Other buyers flush with dollars, like China, appear to be buying U.S. origin, where quality is higher.
China was again the big buyer of beans for the week, but appeared to slow its purchases in the most recent week. Still, the weekly total of 13.4 million bushels was twice the rate needed to meet USDA's forecast for the marketing year.
This week's total for corn was just 15.4 million bushels, about half the rate needed to match USDA's forecast. While the total should pick up next week — USDA already announced the sale of 17.7 million bushels to Mexico — the slow start to the season makes it likely the government will chop at least 50 million bushels off its forecast in next week's monthly crop report.
U.S. sales are being hurt by cheap feed wheat competition. Freight rates are also low enough to allow buyers to experiment: Japan bought corn out of the Black Sea earlier this week.