After the Bell: Firm Finish in Grain, Soy; Livestock End Mixed

Posted on Mon, 11/16/2020 - 14:19

Corn: Prices ended higher and near the session highs. December corn rose 5 3/4 cents to $4.16 ¼.  U.S. futures followed Chinese Dalian futures higher with the latter rising to a new high and closing at $9.96 on Monday. The market was also supported by news Moderna’s Covid-19 vaccine trial proved almost 95% effective, raising hopes for stronger recovery in the world economy in 2021.  Gulf corn basis bids firmed 3 cents today as farmer sales have dried up after last week’s retreat in futures after the bullish USDA supply and demand forecasts. Rumors surfaced that China was looking for U.S. corn for April and May shipment, helping to ignite new futures buying.  The U.S. inspected 817,476 MT of corn for export the week ending Nov. 12, which was in line with expectations. China was the destination for almost 180,000 MT last week, according the USDA data on Monday.  

Soybeans: January soybeans closed up 5 1/2 cents at $11.53 1/2. December soybean meal rose $1.20 to $389.30 and December bean oil gained 108 points at 69.54 cents and set a new contract high today.   Traders are looking for fresh news to extend price gains, although some beneficial moisture in South America recently and more in the forecast this week is likely to limit the upside in the near term.  Today’s October NOPA soybean crush report came in at 185.245 million bushels, which is a record for any month and well above the 177.1 million bushels expected.  Price direction for at least the near term will be determined by additional Chinese demand for U.S. supplies and South American weather.  

Wheat: Wheat futures faced pressure overnight but worked higher during the day trading session. The market settled high-range with HRW wheat up 5 ½ to 6 ¼ cents, SRW wheat 2 ¾ to 4 ½ cents higher and spring wheat futures narrowly mixed. Wheat futures got a lift during the day trading session from strength in the corn futures market, as fundamental backing for higher trade is limited. Global wheat supplies are ample and the U.S. has not been a major beneficiary of the recent global uptick in wheat procurement. Today’s export inspections update was a reminder of that, with inspections of 325,948 MT near the lower end of pre-report expectations.  

Cotton: December cotton futures rose 111 points today to close at 69.57 cents and near the daily high. Cotton futures rallied with the U.S. stock market today on news Moderna said its Covid-19 vaccine was 94.5% effective in preventing the virus based on interim data from a late-stage clinical trial, becoming the second U.S. company in a week to report results that far exceed expectations. U.S. stocks are jumped sharply higher, with the DJIA hitting a record high, even as new restrictions to combat the pandemic were imposed in Michigan and Washington on Sunday. European and Asian stocks rose on strong economic data from China and Japan. All of the above worked to push cotton futures prices higher today.

Hogs: Hogs finished mixed, erasing earlier gains. December hogs were up 25 cents to $65.15 and February futures were down 80 cents at $63.75. Cash hogs moved down 16 cents on average Monday. Pork cutout values were up $1.89 on modest sales. The market will remain focused on cash trends this week with plenty of Covid-19 anxieties rising with expanding stay-at-home orders looming over the food service and travel industries. This morning’s news on that front is more positive with a positive trial test for Moderna’s vaccine. The industry is also quite aware that plant labor has been strained throughout the last six months and increased Covid-19 cases and nervousness among the labor force is perhaps again a threat to plant speeds.    

Cattle: Live and feeder cattle futures finished mixed with a slight upside bias in most contracts following a light, two-sided day of trade to kick off the week.  Today’s light and choppy trade may be a precursor of what’s to come the next couple of days as traders wait on cash cattle trade to develop. While traders are hopeful the cash market will build on last week’s $3.29 gain in the average price, it may take time for active trade to develop unless packers get aggressive with bids. Plus, live cattle futures are already trading above last week’s cash market. Still, if traders truly sense higher cash trade will develop, futures should continue to work to the upside. Choice boxed beef prices dropped 13 cents this morning, while Select rose $1.98. Movement was moderate after strong sales last Friday.