After the Bell: Corn Lower, Soy, Wheat Mixed in Choppy, Quiet Trade

Posted on Mon, 03/22/2021 - 14:30

Corn: Futures ended lower and just above initial support. May corn fell 8 3/4 cents to $5.49 and December fell 3 1/2 cents to $4.68. Corn prices fell on a lack of fresh demand news amid rising tensions with China after last week’s U.S.-China talks in Alaska.  Improved weather in South America encouraged funds to trim long positions heading into month’s end. Funds were net buyers of almost 14,400 futures and options in the week ended March 16, pushing the net long to almost 371,000, the largest since mid-January. The U.S., U.K., and Canada joined the European Union to impose sanctions against China over alleged human rights abuses on the Uyghurs in Xinjiang, drawing an immediate reaction from Beijing with sanctions on EU individuals and entities. The White House said it was evaluating its next steps toward China after sanctions over alleged abuses in Xinjiang announced earlier on Monday.  U.S., European or South American farmers are not going to sell a futures break and Midwest cash market basis is steady to firmer today.  

Soybeans: May soybeans closed up 1 1/4 cents today at $14.17 1/2 a bushel. November beans were down 4 cents at $12.16. May soybean meal closed down $11.30 at $396.60 today. Prices closed near the session low today and hit a three-month-low. Meantime, May bean oil hit a new contract high and soared by the daily limit of 250 points, to 56.37 cents. The feature today in the soy markets was spreaders selling soybean meal and buying the bean oil. Major reports from USDA on planting intentions and March 1 inventories may keep price action in futures choppy until the March 31 data release. The weekly CFTC Commitments of Traders report once again showed funds were net sellers in soyoil instead expected buyers. Funds were also net sellers of 3,561 contracts in soybeans, reducing their net-long position to about 156,000 contracts. Weather forecasts are looking a little more promising for follow-up rains in Argentina after widespread precip the past week. Drier weather will aid soybean harvesting in Brazil, with exporters ramping up shipments and the ship lineup already over 16 MMT.

Wheat: Wheat closed mixed on spread trading. May SRW futures were up 1/4 cent to $6.27, May HRW was down 7 1/4 cents to $5.78 1/4 and May spring wheat fell a penny to $6.27. Prices extended their month-long decline today on falling weather-risk premiums. Futures did uncover some short-covering interest and new buying to pare or erase earlier declines. Wheat inspected for export topped expectations during the week ending March 18 at 648,485 MT. Another round of rain in the U.S. central Plains will help to further ensure an improving production potential over the next week to 10 days after dryness last autumn and winter and damaging cold in February. In the meantime, there is need for moisture in the southern Plains. The northern U.S. Plains, Pacific Northwest and Canada’s Prairies are still dealing with drought and the pressure will build in these areas for rain to fall soon for spring cereals to be planted normally in April and May.  

Cotton: Cotton futures traded within Friday’s trading range today, with futures settling 6 to 31 points lower with the exception of the October contract that edged out a 5-point gain. Most contracts settled mid- to low-range. Fresh news was lacking for the cotton market, resulting in a fairly quiet day of trade for the market. The market continues to monitor dry weather in cotton producing regions of Texas, but crop concerns are unlikely to really mount until next month when more of the crop is seeded. In addition, southeastern production areas are in line for rains. Acreage uncertainty may also lead to continued choppy to lower price action until USDA releases its planted acreage projection on March 31.. Our survey work signaled U.S. producers will likely plant a bit more cotton this year, with planting intentions at 12.2 million acres. But the firm IHS Market said its survey work pointed to cotton plantings of 11.804 million acres in 2021, which would be a 2.4% retreat from year-ago.  

HogsApril lean hog futures gained $0.80 today to close at $95.05. June lean hogs closed down $1.125 at $99.475 today. Profit taking was featured in the June contract. June hog futures retreated on speculative fund profit-taking ahead of USDA’s Quarterly Hogs & Pigs Report Thursday. There’s been a lot of talk about hog slaughter falling short of what USDA signaled in its last H&P Report, but the drop in kills over the past month seems tied to producers pulling marketings forward during January.  As of March 16, the funds increased net-long positions another 1,546 contracts to 75,833 futures and options, the most since 2017. Selling interest in futures should be limited this week as the CME lean hog index has hit its highest level since July 2017, last quoted at $91.71, up 47 cents at midday.  

Cattle: April cattle rose 37.5 cents to $118.775 and June futures rose 25 cents to $118.925. May feeder cattle rallied 42.5 cents to $145.10.  With the cash side of the market stronger coupled with last week’s sizeable break in futures, the key now is limiting additional weakness in futures and to further gains in cash cattle. Boxed beef was higher this morning on light to moderate sales for light offerings. Choice was $1.03 higher at $231.02 and Select gained $1.24 to $221.19.  Sales were just 41 loads and that number will need to improve to support cash bids and futures this week. Cash cattle trade activity is quiet to start the week. Bids and asking prices have yet to be established. It is likely the bulk of the week’s business will be delayed until at least midweek.  Packers only purchased 81,000 negotiated cattle last week, down 12,000 head from the prior week, and may need to buy in the open market after using captive supplies in recent weeks to limit open-market bidding.