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Bad economic data out of China (and neutral out of the U.S.) led the markets lower, with South American rains aiding on the downslide. March wheat at a half-cent higher was the sole shining green number on the board today. No new daily sales this morning from USDA. Tomorrow we will get the EIA report on ethanol production.
March corn made a new low this morning, while March soybeans saw another double digit day of losses. I believe soybeans are oversold, however, without some sort of fundamental reason to spur activity, funds seem perfectly content to continue pressing the downside.
Stocks fade driven by pessimistic Chinese data and souring prospects for aggressive rate cuts due to the ongoing strength in the U.S. economy. China's Q4 GDP disappointed at 5.2% versus expectations of 5.3%.Retail sales in China slowed in December, showing a 7.4% year-on-year increase, falling from the 10.1% seen in November while missing market expectations of 8.0%. This concerns the trade, especially in regards to soybeans about weakening demand. In fact, Soybean prices in Brazil have fallen sharply in recent days - with premiums down 60 cents - on weak Chinese demand.
U.S. retail sales rose by more than expected in December, climbing 0.6% month-on-month versus analyst estimates of a 0.4% rise and doubling the 0.3% seen in November. Today's data also points to a stronger than expected U.S. economy. While this sounds like good news on paper, stocks are reacting negatively because this gives the hawks at the Federal Reserve more ammunition to justify holding rates higher for longer.
Commodity Weather Group mid-day forecasts ran wetter for Brazilian crop areas for both the 6-10 and (especially the) 11-15 day time frames.
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