After the Bell: Grains, Soy Extend Declines ahead of USDA Reports Wednesday

Posted on Tue, 03/30/2021 - 14:32

Corn: March corn fell 7 1/2 cents to $5.39 1/4 and December futures were down 8 3/4 cents to $4.52 1/2.  Corn fell today on chart-based selling, a firmer dollar and long liquidation in front of tomorrow’s USDA reports. The dollar index rallied to a fresh five-month high today, after yields on 10-year Treasuries hit fresh 14-month highs near 1.78%. Crude oil prices were down nearly 2% at midday and gold prices tumbled almost $30, further curbing speculative buying based on a reflation play. Before the reopening USDA announced 100,800 MT of corn were sold to unknown destinations for old-crop delivery but that failed to provide much support today as Chinese corn futures fell to a new low price for the calendar year overnight. Tomorrow we will see what the record Chinese buying did to March 1 U.S. corn stocks and farmer planting intentions.  

Soybeans : May soybeans closed down 26 1/4 cents today at $13.66 3/4 a bushel.  November beans fell below $12.00 for the first time since Feb. 22, closing at $11.86 1/4. May soybean meal futures closed up a dime at $398.20 today. May bean oil closed down 250-point limit at 50.46 cents today.  Long liquidation in futures was  the feature Tuesday, ahead of the USDA planted acreage survey and March 1 stocks estimates on Wednesday morning. Funds had boosted their net long in soybean futures and options by nearly 7,000 contracts to 162,853 contracts, though the overall position has not materially changed in more than two months. Weather leans negative. Argentina got the rains forecast and drier weather the next two weeks will aid harvesting. A dry bias in Brazil the next week will support rapid soybean harvesting.    

Wheat: Wheat futures faced pressure today. SRW wheat was the leader to the downside and finished with losses of 11 ½ to 15 cents for the day. The front-month hit its lowest level in more than three months and the July contract closed below $6.00 for the first time since Dec. 16. HRW wheat also dropped to multi-month lows and finished 9 ¾ to 11 cents lower. Spring wheat futures finished 7 to 9 cents lower, after dropping to the lowest point since early January/late December. Positioning for month’s end and USDA’s much-anticipated Quarterly Grain Stocks and Prospective Plantings reports weighed heavily on a number of raw commodities today, wheat included. Analysts surveyed by Reuters expect the department to report other spring wheat plantings around 11.644 million acres, which would be down 4.9% from year-ago. But the range of guesses is wide, spanning nearly 2 million acres. Tight corn stocks have also boosted feed use and made quarterly grain stocks more of a question mark.  

Cotton: Cotton futures finished a quiet, two-sided day of trade with gains of 15 to 27 points through the December contract.  On the surface, today’s price action the cotton market doesn’t appear to be much. But given heavy selling across much of the commodity sector and additional strong gains in the U.S. dollar index, the modest gains in cotton were actually rather impressive.Focus on Wednesday will be USDA’s Prospective Plantings Report. Traders expect USDA to signal producers intend to plant 11.9 million acres to cotton this year, according to a Reuters survey, down from 12.1 million acres last year. Our acreage survey suggested plantings would rise slightly to 12.2 million acres.  

Hogs: April lean hogs rose $0.55 to close at $100.025 today and closed at a contract-high close. June hogs closed up $0.80 at $106.025 today and hit a contract high. The rallying cash hog market is supporting gains in futures. The CME’s lean hog index is up to $97.38, a little more than $3 behind nearby April futures with a little more than two weeks to expiration. Cash hog bids rose $2.11 on average, today. The pork cutout value edged 63 cents higher on strong sales of 238.93 loads. Today’s hog slaughter is estimated at 490,000 head compared with 465,000 last Tuesday and 491,000 head one year ago at this time.

Cattle: April live cattle closed unchanged at $120.975 and June slipped 42.5 cents to $122.225. May feeders were unchanged at $152.20.  Futures were well contained inside of Monday’s ranges but lacked much fresh buying interest to add to recent gains. While negotiated fed cattle prices broke out of a tedious seven-week trading range, packers are waiting to bid until later this week with feeders asking higher money this week. Packers were enticed by tightening supplies of market-ready cattle last week to extend their purchases. Last week saw 100,000 head trade for only the second time this year.  But the spread between cash and futures must narrow in to less than $2.50 to discourage deliveries against the April contract.