After the Bell: Mixed Grains, Higher Soybeans in Quiet Trade

Posted on Mon, 04/05/2021 - 10:33

Corn:  Futures ended mixed and well below overnight highs. May corn was down 6 1/2 cents to $5.53 1/4 and December rose 4 cents to $4.88 1/2. May futures fell on rolling of positions out of the nearby contract with the index rolls set to begin Thursday and a sharp decline in crude oil futures amid OPEC+ plans to expand production.  May lost to December futures despite steady-to-firm cash basis. Funds boosted net longs in corn futures and options to 395,584 contracts from 388,175 a week earlier when most expected net selling. That is the funds’ most optimistic corn stance since Feb. 1, 2011. December corn rose to a new contract high as traders refocused on supply worries after the markets were closed on Friday.  Most-active May corn futures fell a second day, after hitting its highest price since June 2013 at $5.85 a bushel on April 1.  The April 9 WASDE report will likely show USDA cutting its old-crop carryover forecast, with upward revisions to exports, feed/residual use and the U.S. ethanol grind.   

Soybeans: May soybeans closed up 10 3/4 cents at $14.12 3/4 a bushel today. Prices closed near mid-range. May soybean meal closed down $3.90 at $406.30 today and near the session low.  May soybean oil rose 68 points at 52.81 cents and nearer the session high. The soybean and oil bulls were still riding the effects of last week’s surprisingly bullish USDA planting intentions report and also by a decline in the U.S. dollar index. The meal market bulls have quickly faded, however. Selling interest will likely be limited this week, heading into Friday’s USDA Supply & Demand Report. Bullish traders are looking for USDA to trim its old-crop soybean carryover projection slightly from an earlier record low stock-to-use ratio. There will be no new-crop USDA projections until the May WASDE report.  

Wheat: Wheat futures ended mixed with SRW futures up 3 1/2 to 7 1/4 cents and spring wheat rising 6 1/4 to 8 3/4 cents. HRW futures were down about 2 cents today. SRW futures led the rally today after USDA announced 120,000 MT of that class of wheat was sold to unknown destinations for new-crop delivery. Some speculated that could be new Chinese business amid rumors last week they were shopping. China has sold 25 MMT of wheat from its reserve this calendar year, but the trade is unsure of whether China will continue to purchase U.S. wheat as they will likely drain supplies first from France and then move onto Russia, Ukraine and Canada. Saudi Arabia bought almost 300,000 MT of wheat for May and June delivery during the weekend and Egypt is tendering tonight for August deliveries.   

Cotton: Cotton futures got off to a firmer start but buying faded as the day progressed and futures settled low-range and down 9 points to up 13 points through the March 2022 contract. Most contracts spent the day within the lower half of Thursday’s defensive trading range.  Cotton futures have moved sideways to lower since mid-February, with USDA’s Prospective Plantings Report last week giving traders little reason to buck the trend. USDA said its survey work signaled producers planned to plant around 12.04 million acres to cotton in 2021, which was a bit higher than expected and just a modest decline from 2020 plantings. But much of western Texas continues to deal with drought, and longer-range forecasts are not promising for relief.  

Hogs: June lean hog futures closed down $0.725 at $105.60 after hitting another contract high early on today. July hogs fell $0.925 at $104.225. Lean hog futures saw some mild profit taking and a corrective pullback today from recent solid gains. Prices are still supported, however, by solid U.S. pork exports, including recent sales to China. Summer hog futures contracts posted tops in April during 2004, 2010, 2011, and 2019, but highs in May are more typical. The pork cutout value rose another $5.31 to $113.75 today, led by gains in hams and bellies. Movement was a light 121.47 loads. Cash hog prices were up 16 cents today, on average, on a national direct basis.  

Cattle: Live cattle futures finished high-range with gains of $1.35 to $1.875 through the December contract, as all but the April contract posted new highs. Feeder cattle also ended high-range with gains of $1.925 to $2.55 through the November contract. Fundamental support for the move higher in cattle futures came from strength in the cash and product markets. Cash cattle trade averaged $118.08 last week, up $2.89 from the previous week. If futures are able to build on today’s gains, it should support higher cash prices again this week. Additional support came from surging boxed beef prices. Choice beef was up $4.84 this morning, while Select firmed $1.66, though movement was light at just 59 loads. With Lent done, retailers will be buying meat for grilling season features. Wholesale beef prices are elevated, but relatively cheap compared with pork values, which are also rising.