After the Bell: Corn Rises on New Sales to China; Livestock Close Higher

Posted on Wed, 03/17/2021 - 14:18

Corn: May corn futures closed the day up 3 3/4 cents at $5.58 and closed at a five-week-high close today. December corn lost 2 1/4 cents at $4.75 1/2. The corn bulls are having a good week so far, on fresh demand news. USDA reported a daily sale of 1.224 MMT of corn sold by private exporters to China. That follows the announcement Tuesday of 1.156 MMT of corn sold to China. That brings total sales to China to more than 21 MMT this season. The sales come after fears the rising cases of African swine fever would curtail feed demand and may lead to some prior sales getting rolled over to the next marketing year.  Weekly U.S. ethanol production rose 3.5% to 971,000 barrels per day and inventories tumbled 730,000 barrels to 21.34 million barrels. Rising production and margins have firmed basis bids as processors and exporters are competing for supplies amid tight farmer holding.  

Soybeans: Soybean futures opened higher overnight, but quickly turned lower and spent much of the session in the red. Futures settled mid- to low-range and down 5 ½ to 11 cents, with new-crop futures leading losses. Soymeal finished steady to $1.70 lower. Soyoil closed 49 to 83 points lower.  Traders booked some profits in soybeans and a number of commodity markets today, with more choppy trade possible leading up to USDA’s key updates on planting intentions and quarterly grain stocks on March 31. High-level talks in Alaska between U.S. and Chinese officials at week’s end have faded a bit in importance. The Biden administration has worked to downplay expectations for the meeting, indicating talks would be focused on discussing priorities and differences rather than crafting agreements. Recent rains in Argentina have helped to stabilize crops.  Meanwhile, drier weather in Brazil should help farmers to make better progress harvesting soybeans, helping exporters to work through backlogs.  

Wheat: May SRW wheat futures closed the day down 7 cents at $6.40 and May HRW futures lost 7 1/4 cents at $6.01. Prices closed nearer the session low, with HRW closing at a nine-week-low close. May spring wheat futures fell 4 1/2 cents to $6.33 1/4.  U.S. wheat futures prices failed to build on strong rebounds on Tuesday. The large volumes of precipitation over the U.S. Plains during the weekend have eased concerns over soil moisture, and expectations are rising that current levels should be sufficient until early spring after the state crop condition reports showed improving wheat conditions in Kansas and Oklahoma last week, before the rain and snow. Pressure on wheat futures today also came from speculation Russia may become a more active exporter if crop production improves. 

Cotton: May cotton futures closed the day down 41 points at 86.51 cents and December cotton rose 7 points to close at 83.72 cents. The market continues to trade sideways and consolidate after prices hit a five-week low on March 10. The cotton market bulls are showing resilience the past few sessions, which is giving them some confidence to step in on the buy side on weakness. The U.S. stock market is also continuing its bullish ways as the Dow and S&P 500 index this week hit record highs. And the Federal Reserve this afternoon said U.S. economic growth prospects are rising and estimated GDP in 2021 to be at a solid 6.5% growth rate. That bodes well for better consumer demand for apparel as the year progresses. Traders will get a read on worldwide demand for the U.S. fiber with Thursday morning’s weekly USDA export sales report.

Hogs: April hogs rose 77.5 cents to $93.675 and June rallied $1.35 to $102.10.  Another strong day with new contract highs. The national average cash price rose 59 cents Wednesday and the CME Lean Hog Index gained 56 cents yesterday to $89.91, the highest since July 2017. The market is supported by smaller slaughter supplies than the December Hogs & Pigs report projected. USDA updates its March 1 hog herd on March 25. Slaughter this week is estimated down 29,000 head or 1.9% from a year ago.  Midday pork cutout values rose $1.91 to $102.81, the highest since May 2020 and up from $78.58 to start this year. Pork demand has been stronger than expected amid food service outlet restocking on active U.S. vaccinations and reopenings, and consumer at-home buying has not slowed

Cattle:  Live cattle ended near session highs with some new contract highs posted in deferred futures. April cattle were up $1.225 to $119.425 and June futures rose 32.5 cents to $121.90. May feeders cattle rose 42.5 cents to close at $150.175. : Cash cattle traded at $114 in Kansas and Nebraska and a few traded $114.75 on the Fed Cattle Exchange this morning. The strength in the cash market compared with last week was positive but it will probably take more trade above $115 to sustain the rally in futures. Midday boxed prices were mixed with Choice rising $1.87 and Select slipping 8 cents on moderately active sales. Boxed beef values, though, appear to be carving out a low and preparing for a rally that will take the wholesale beef market higher into the summer. New stimulus checks are reaching consumers this week and restaurant reopenings will add to beef demand.