After the Bell: Corn Leads Higher; Livestock End Mixed to Weaker

Posted on Wed, 11/18/2020 - 14:21

Corn: Futures finished in the upper end of today’s trading range with gains of 3 to 5 1/2 cents in 2020-crop contracts. New-crop December 2021 futures ended 1 1/2 cents higher. As has been the case each day this week, bull spreading was featured again today. After unwinding bull spreads on the corrective pullback late last week, the strength in the front end of the market signals the correction is complete and futures are poised to push to new highs. Fundamental support for the corn market continues to come from export demand. While the Chinese business that has been rumored since last Friday hasn’t materialized via daily sales announcements, USDA announced a daily sale of 140,000 MT of U.S. corn to unknown destinations this morning. Weekly export sales data Thursday is the focus.  

Soybeans: Futures end higher but well below session highs. January beans rose 6 cents to $11.75 ¾ after touching $11.89 3/4 earlier today. January meal ended down 90 cents at $394.90 and January soyoil surged 90 points to 38.21 cents. Soybeans jumped up to new 4 1/2-year highs today with few changes in the overall bullish fundamental story that has been driving prices higher for three months. China is still boosting imports of multiple crops, from multiple countries, with U.S. beans the chief beneficiary. Money continues to flow into the broader commodity sector. Export sales in the morning will provide more insights to whether Chinese buying is slowing after more almost two weeks of no daily USDA sales announcements. Traders are looking for new sales in a wide range of 600,000 MT to 1.2 MMT compared with 1.468 MMT last week, which was the smallest since the marketing year began Sept. 1.   

Wheat: March soft red winter wheat futures closed up 3 1/2 cents at $6.06 1/2 today and March hard red winter wheat futures gained 4 3/4 cents at $5.66 1/4. Wheat futures markets continue to see buying support from rallying corn and soybean futures prices. Some of the late support came from unwinding short wheat/long corn or soybeans. Also, Covid-19 shutdowns have helped support better flour demand and that may provide underlying support. However, wheat finds itself in a difficult time of year when sustaining rallies becomes difficult without help from corn and/or soybeans. World wheat buying has improved recently but the U.S. continues to get only a small portion of the new business.  

Cotton: December futures rose 57 points to 69.68 and March gained 53 points to 71.83 cents. Futures rose on Wednesday as the U.S. dollar eased and global equities gained on increasing optimism about a COVID-19 vaccine, countering pressures from coronavirus-induced demand concerns. World equity markets gained and were just shy of a record, while the dollar index touched a more than one-week low after Pfizer said its COVID-19 vaccine was 95% effective and it would apply for emergency U.S. authorization within days. Restrictions imposed to curb the spread of the coronavirus, which has infected over 55 million people worldwide, have negatively impacted the global economy and demand for apparel.

Hogs: Lean hog futures settled mixed with December and February futures 27 ½ cents higher and deferred months down 37 ½ cents to 55 cents. Average hog weights in the Iowa/southern Minnesota market climbed 1.4 lbs. from week- and year-ago levels, which is concerning. The market has kept a close eye on weights to make sure slaughter is keeping up with rising supplies. Strong domestic and export demand has helped the market to do a good job of dealing with the spring’s backlogs. And most believe USDA underestimated the extent of spring culling. Three days into the week, processors have slaughtered 1.464 million head of hogs, a 24,000-head increase from last week but a 20,000 head decline over year-ago.  

Cattle: December live cattle futures closed down $0.675 at $110.65 and February live cattle finished down $0.425 at $113.15. January feeder cattle futures dropped $2.425 today at $137.30. Cattle futures saw buying interest squelched today by rising Covid-19 inflections in the U.S. that have hit record levels recently, as vaccines probably won’t be available for widespread distribution until well into 2021.  Today’s online Fed Cattle Exchange auction saw some sales take place at $110.25.  Choice boxed beef values rose another $1.81 at noon Wednesday, with Select gaining 33 cents and movement dipping to 92 loads. Today’s cattle slaughter was pegged at 119,000 head, compared with 115,000 last Wednesday and 119,000 head at this time a year ago.