Retail sales rise; futures commentary

Retail sales break three-month decline

Retail sales data rose 3.5% year on year for the period including January and February.

This is the first year on year growth seen in retail spending since September 2022. Retail sales saw year on year declines from March through May last year, and from October through December.

Restaurant spending rose 9.2% year on year after dipping in December. Grocery spending was also reported as climbing 9.0% year on year.

This strong growth is difficult to reconcile with market research and even provincial government reports that weak demand for even basic staples such as flour.

Futures Commentary

Markets were relatively quiet today following the selling at the start of the weak.

Hogs gave up half of yesterday’s gains and the cash market continues to roll over, falling another 1% today. Prices are now close to falling below the 5:1 hog to corn ratio which would again trigger the highest government price warning, but this inability to meaningfully rally after the last round of government warnings has weighed on sentiment.

No.1 domestic soybeans also continue to fall. This week, prices have given back most of the gains from last week’s government announcement to boost stockpiling.