April 24 - Stocks firmed on the open today, pulling back only briefly when existing home sales data were released. That data showed that March existing home sales in March fell to an annualized rate of 4.02 million units, down from 4.27 million in February, and below analyst expectations of 4.12 million units. Existing home sales in March were down 5.9% on the month, and down 2.4% on the year. Yet, the overall tone remains firmer today as investors continue to work their way through a plethora of earnings reports. The VIX continues to slowly work its way lower, as it trades near 27 at this hour, which is essentially its lowest level since President Trump announced his reciprocal tariffs early this month. The dollar index is trading near 99.5. Yields on 10-year Treasuries are trading near 4.33%, while yields on 2-year Treasuries are trading near 3.81%. Crude oil prices are modestly higher, while the grain and oilseed sector is mixed, with corn and soybean prices posting modest gains, while wheat prices lean to the weaker side.
The White House continues to speak of progress in trade negotiations with the dozens of countries that have requested negotiations to lower tariffs. It has hinted at discussions with China, but I see no evidence of actual formal talks currently occurring with China. Instead, I see China playing the waiting game. It monitors our media, and I believe that it believes it will be able to escape without making any concessions if it waits long enough in hopes that President Trump's own party will turn on him. In fact, China is calling for all reciprocal tariffs to be cancelled, rather than speaking of negotiating. As such, President Trump needs some victories by way of significant trade agreements with other major trading partners. Word from the White House today was that we are close to such with India. We've heard similar reports regarding other major trading partners over the past 10 days as well. We'll likely see momentum carry into more agreements once the first big agreement is reached, but getting that first one is the most difficult. The markets are being patient for now, with commodity traders slowly focusing more on actual supply and demand fundamentals, while stock traders focus on earnings reports while waiting for hard data on the economy that actually reflects conditions for the month of April. Thus far most of the hard data merely reflects what was happening in March leading up to the tariff war. Meanwhile, the major pharmaceutical companies are bracing for possible tariffs on drug imports that could be announced by the White House soon.
Exporters sold 45.4 million bushels of corn in the week ending April 17, along with 10.2 million bushels of soybeans and 0.8 million bushels of grain sorghum. Meanwhile, USDA reports net reductions of 5.3 million bushels of current-year wheat sales, while new-crop sales totaled 13.7 million bushels. The new wheat marketing year will begin on June 1, so buyers are starting to focus more on new-crop purchases. Marketing year to date wheat export sales are on pace to hit USDA's target at the end of next month, while grain sorghum sales for the year to date fall short of the seasonal pace needed to hit the target by 24 million bushels. Marketing year to date corn export sales total 2.273 billion bushels, which is up 463 million bushels or 26% from the previous year's pace, and 120 million bushels above the seasonal pace needed to hit USDA's target for the year ending August 31. Marketing year to date soybean export sales total 1.729 billion bushels, up 204 million bushels or 13% from the previous year's pace, and up 36 million bushels from the seasonal pace needed to hit USDA's target by August 31st.
