After the Bell | March 8, 2022
Corn: May corn futures rose 2 1/4 cents to $7.53. December corn rose 1 cent to $6.43 3/4 after posting a contract high at $6.54 3/4. Corn futures fell early on profit-taking but gained support from gains in soybeans and soymeal. Ongoing worries regarding grain trade disruptions from Russia’s invasion of Ukraine continued to underpin corn prices. USDA’s Supply and Demand Report tomorrow likely will be overshadowed by geopolitics. USDA is expected to lower its Brazilian corn crop estimate for the second month in a row, by about 1 MMT to 112.98 MMT, based on a Reuters survey of analysts. Argentina’s crop estimate is expected to be reduced nearly 2 MMT, to 52.09 MMT.
Soybeans: May soybeans rose 30 1/4 cents to $16.89 3/4, the highest closing price since March 1. May soybean meal rose $14.60 to $473.30 per ton, a lifetime high settlement for the contract. May soybean oil rose 153 points to 75.75 cents per pound. Nearby soybeans climbed as crude oil rallied and drought in South America continued to push export demand to the U.S. China extended a string of U.S. soybean purchases that began in late January. USDA, in its Supply and Demand Report tomorrow, is expected to lower its Brazilian soybean crop estimate for the third month in a row. Brazil’s 2021-22 soybean crop is pegged at 129.01 MMT, down from 134 MMT in USDA’s February report and a three-year low. Argentina’s crop estimate is expected to be cut to 43.39 MMT from 45 MMT. Global soybean ending stocks for 2021-22 are expected to be lowered about 3.37 MMT, to 89.46 MMT, the lowest since 78.6 MMT in 2015-16.
Wheat: May SRW wheat fell 7 1/2 cents to $12.86 1/2 after hitting a contract high at $13.63 1/2. May HRW wheat fell 52 cents to $11.99 1/2. May spring wheat fell 53 1/2 cents to $11.44. Wheat futures fell sharply but still recovered much of an overnight tumble following exceptionally volatile action and wide trading ranges. May SRW had a range of $1.99 1/2. The Russia-Ukraine war continues to fuel uncertainty over grain production in Ukraine and exports from the Black Sea. Extreme price volatility suggests a climatic phase is in the works for a major bull run in wheat futures. Both markets saw profit taking from speculators today, especially in HRW futures.
Cotton: May cotton futures rose 103 points to 117.97 cents per pound. Firming U.S. equity indexes and slight U.S. dollar weakness helped boost cotton prices, which continued to be influenced by broad global economic developments and the Russia/Ukraine war. Traders were also evening up positions ahead of the USDA Supply and Demand Report. Of particular interest will be any shift in USDA’s 2021-22 U.S. cotton export forecast and in the projected carry-out for the current crop year.
Cattle: April live cattle climbed $1.15 to $139.05 and April feeders gained 65 cents to $60.325. Cattle market fundamentals have changed little but trade focus seemed to shift from concern over geopolitics and economics to grocers’ historical tendency to step up beef purchases around this time of year. While Lent may limit consumer beef purchases in early April, there likely will be a spring demand surge after the late arrival of Easter April 17. Early cash trading this week came in around $138.00, down from last week’s average of $140.61. Choice cutout values fell $2.27 today to $252.44, the lowest since April 1. Movement was strong at 194 loads.
Hogs: April lean hogs rose $2.65 to $102.925, while deferred contracts jumped over $3.00. Hog futures surged behind a technical recovery from yesterday’s drop to four-week lows and strength in wholesale pork. Pork cutout values fell $1.25 today to $105.40. Movement totaled nearly 298 loads. Signs that the cash market has topped and expectations for seasonal weakness may limit upside, but the tight outlook for hog supplies should provide a floor under futures. The next CME lean hog index is expected to fall 4 cents to $99.24.
