After the Bell: Corn Leads Higher on Rising World Prices, Weather Concerns

Posted on Tue, 04/13/2021 - 14:35

Corn: May corn rose 11 cents to $5.80. December futures rose 7 3/4 cents to $5.04 1/4 after setting a new high at $5.05 3/4. Corn rebounded from sharp losses Monday, following rising prices in Brazil, which reached a record Tuesday, and firming in Chinese corn futures.  Tightening supply fundamentals tend to support traders buying the breaks when they happen. The delivery period for May futures contracts occurs in two weeks and traders are focused on U.S. cash markets trading well above futures. End-users may use taking delivery as a cheaper alternative to cash market purchases.  Showers are limited to the northern half of Brazil’s safrinha corn the next 10 days and shower forecasts are reduced for late in the period. Crop stress still seen for at least half of safrinha corn.   

Soybeans: July soybeans closed up 5 3/4 cents at $13.84 3/4 a bushel today. November beans rose a penny to close at $12.51 1/4. July soybean meal futures fell $6.00 to close at $400.00 and July bean oil gained 157 points at 51.15 cents. A weaker U.S. dollar index today helped provide some support to the soybean and bean oil futures markets after solid losses Monday. Soyoil followed the Malaysian palm oil futures, which rose 2% on Tuesday, snapping a three-session decline. Meanwhile China’s Dalian soyoil gained 0.4% white its palm oil futures declined 0.3%. Spreaders were also likely buying soybean oil and selling soybean meal futures today. China imported 7.77 MMT of soybeans during March, an 82% surge from year-ago, according to Chinese customs data. The surge was in part driven by the clearance of Brazilian shipments after delays.  

Wheat: May SRW futures rose 1 3/4 cents to $6.29 3/4, May HRW was up 5 3/4 cents to $5.84 3/4 and May spring wheat rallied 5 3/4 cents to $6.48 1/2.  Wheat futures followed corn and soybeans higher, with last Friday’s USDA forecast for the smaller world carryover lending additional support.  Cold weather forecasts added to the positive tone today but the market does not seem immediately concerned. The wheat complex posted its first week of gains since mid-February last week after values held the previous week’s lows, spurring buying support with spring wheat leading the way on drought concerns. Snow continued in central and southern Saskatchewan and southern Manitoba as well as North Dakota and northern Minnesota this morning. Moisture from this snow as it melts will improve topsoil moisture for better planting of early season crops, but follow-up moisture will be important

Cotton: Cotton futures finished near session highs today. The July contract ended 168 points higher, while new-crop December futures finished 102 points higher. Cotton futures were supported by general strength in the commodity sector today. That was partly driven by weakness in the U.S. dollar index, which fell to its lowest level since March 23. The outside market influences, including higher corn and soybean values, helped fuel fund buying in the cotton market. Fundamental support came from dryness concerns in cotton-heavy areas of Texas. USDA’s crop progress data Monday afternoon showed U.S. planting one percentage point ahead of the five-year average.

Hogs: June lean hogs closed up $0.025 at $106.175 today. July hogs lost $0.15 at $104.325.  The lean hog futures market paused today after Monday’s big losses. The big speculative “fund” traders who had been long the hog futures market are now re-thinking their strategies. Seasonal studies are suggesting a high may be arriving earlier this year given the rally’s steep ascent. The pork cutout value gained a solid $5.02 at midday Tuesday, with bellies and hams leading the gainers. Movement was 235.96 loads. Cash hog prices today were up 39 cents, on average, according to USDA’s national direct trade. Hog slaughter last week was just above the February low and was the lowest full schedule slaughter of the year. Hog slaughter should steadily decline into June.  

Cattle: Live cattle futures got off to a firmer start, but quickly turned back to the downside. The market finished low-range with losses of 32 ½ cents to $1.175 for the day. Feeder cattle faced heavier pressure and settled $2.00 to $2.425 lower in 2021 contracts. Funds continue to liquidate long positions in the cattle complex, which quickly dropped futures to their lowest levels since late March. But the market’s uptrend remains intact  and April futures are trading right in line with the cash cattle market. The impressive boxed beef market rally in anticipation of strong summer demand has been a major driver of the rally. This morning, Choice slipped $1.60 and Select rose another 74 cents, narrowing the latter’s discount to just $2.91. Just as important, movement held strong at these elevated price levels at 90 loads. Feeder cattle softened as corn prices rose today, reflecting the impact of rising feed costs.