After the Bell: New Highs Corn, Soybeans and Wheat on China Demand Talk, Fund Buying

Posted on Wed, 12/30/2020 - 15:00

Corn: Corn futures finished high-range with gains of 8-plus cents through the July contract. New-crop December futures ended 2 3/4 cents higher. Corn futures were supported by spillover from strong gains in the wheat market for much of the day. Gains were extended into the close after Argentina announced it has suspended corn exports through March to ensure domestic supplies until new-crop corn is available. This eliminates Argentina as an export competitor for the first quarter of the new year and should push more business to the U.S., despite soaring prices. China has already been shopping for U.S. corn of late, with export sources saying the country recently bought up to 10 cargoes of U.S. supplies.  

Soybeans:  March beans rose 4 1/2 cents to $13.00 1/2 and November closed up 5 1/2 cents to $11.03 3/4. March meal gained $3.50 to $427.80 and soyoil rose 11 points to 41.86 cents. Most-active soybean futures rose above $13.00 for the first time since June 2014. The nearby contract is up over 60% since making a low in April at the height of the pandemic and nearly 50% above the August lows. Soybeans and products fell overnight on news of a deal to end the nearly three-week-old port strike in Argentina before moving to new highs in the second half of the day session on short covering and new buying tied to the strength in corn prices after Argentina announced its was suspending corn export registrations until March.  Market bulls are now looking for Argentina truckers to strike after losing work for three weeks from the port strikes.  

Wheat: March SRW rose 22 1/4 cents to $6.40 3/4. March HRW gained 16 ¼ cents to $6.01 1/4. March spring wheat rose 15 3/4 cents to $5.96 1/4.   Futures were mixed overnight before exploding higher after the morning break on reports China was looking for offers on U.S. wheat supplies to replace normal supplies from Australia amid the growing trade skirmish. Prices also rose as wheat shipments delayed by the three-week strike in Argentina may also shift some nearby business to U.S. wheat. Brazil is reportedly looking for some U.S. wheat. Export sales tomorrow morning are expected to show 200,000 to 600,000 MT of new business in the week ended Dec. 24, compared with 393,700 MT sold a week earlier. Traders will be closely examining the buyers of U.S. wheat last week.  

Cotton: March cotton futures closed the day up 96 points at 77.97 cents and hit a 21-month high on the continuation chart. Cotton futures continue to look to the outside markets for direction, and they are mostly bullish. Sharp rallies in grains futures, near record highs for U.S. stock indexes and a wilting U.S. dollar on the foreign exchange market are all positives for cotton. Fresh news in the cotton market is limited, which put more emphasis on happenings in other markets. Also, U.S. government stimulus funds started arriving in some Americans’ bank accounts today, which is also a positive for consumer demand for apparel in the coming weeks.

Hogs: Spring and summer lean hog futures contracts notched new multi-month highs in early trade, but the rally was short-lived. Futures settled well off session highs and anywhere from 7 ½ cents lower in the May contract to 40 cents higher in the front-month. Signs of strong retailer buying of pork this week and a welcome uptick in cash hog prices yesterday helped lean hogs to strengthen in early trade, with the early gains triggering some technical-based buying. But the upside spike gave traders exiting for the holidays an opportunity to book some profits, resulting in a low-range and mixed close. The pork cutout value climbed another 45 cents this morning and is now up more than $4.50 for the week. Movement also held strong at 196.44 loads.  

Cattle: February live cattle futures closed down 12 ½ cents at $114.45 today. April live cattle fell 17 ½ cents to $118.60. January feeder futures were down $1.10 at $138.525. March feeders fell $1.475 at $139.75. Live cattle futures the past two sessions have seen some normal profit-taking and chart consolidation after hitting a three-month high on Monday. Feeder futures have wilted after hitting a nearly four-week high on Monday. Soaring corn futures prices this week have the feeder cattle bulls more tentative.  Choice boxed beef prices were up 56 cents at midday today, while Select rose an impressive $4.18. The Choice-Select spread narrowed to $11.20—a positive sign. Movement was solid at 81 loads.