After the Bell | Aug. 13, 2021
Corn: December corn futures fell 1/4 cent to $5.73 a bushel up, gaining 16 1/2 cents for the week. Corn futures hit six-week highs this week and scored a technically bullish upside “breakout” from a sideways trading range on the daily bar chart, following bullish USDA crop data Thursday. Look for some follow-through speculative buying interest early next week, given the now significantly improved near-term technical posture of the corn futures market. One of the biggest grain market events of the summer occurs for corn and soybeans next week: The annual Pro Farmer Midwest Crop Tour. Throughout the week we will provide members daily updates on what the crop scouts are seeing from the fields across the Corn Belt, with the final results of the tour being released Friday afternoon.
Soybeans: November soybeans surged 24 cents to $13.65 a bushel, up 2.1% on the week. December soybean meal rose $1.90 to $360.40 a ton and December soyoil rose 170 points to 63.28 cents a pound, a two-week high. Soybean futures extended yesterday’s rally after reports of export sales fueled bullish momentum from USDA’s larger-than-expected reduction in its U.S. crop forecast. Early today, USDA announced a sale of 326,000 metric tons (MT) of soybeans to “unknown destinations” and 126,000 MT to China for 2021-22. That marked the seventh consecutive business day USDA announced a soybean export sale. Traders will keep a close eye on export markets in the week ahead, as well as USDA’s next weekly crop condition ratings on Monday. USDA reported 60% of the U.S. soybean was in “good” or “excellent” condition as of Aug. 8, up from 58% a week earlier.
Wheat: December SRW futures gained 9 1/2 cents to $7.74 1/4, up 41 cents on the week. Earlier today, September SRW reached the highest price for a nearby contract since February 2013. December HRW wheat gained 4 1/4 cents to $7.55, a 37 1/2-cent surge on the week. December HRS futures climbed 10 1/2 cents to reach $9.29 ½, up 28 1/4 cents for the week. Traders will likely be digesting the results of the monthly USDA Supply and Demand report during the days ahead, especially the sharp cut to projected global carry-out for the 2021-22 crop year. Recent downgrades to estimated Russian production should prove particularly supportive. However, with bearish seasonal patterns tending to dominate the corn and soy complexes during the second half outlook for corn and soybeans, weakness in those markets might also weigh upon wheat prices.
Cotton: December cotton futures rose 100 points to 94.32 cents per pound, up 262 points on the week. The strong gains in cotton futures to end the week, including the technically bullish weekly high close on Friday, set the table for some follow-through speculative buying early next week. However, the cotton futures market is now at price levels that history dating back to 1972 shows market rallies stall out. Traders will be eyeing tropical depression Fred, which is presently expected to impact portions of the southeastern states next week by bringing some heavy rain and local flooding. Early indications suggest the storm’s winds should not be strong enough to pose a serious threat to most crops. Landfall is most likely near the central Florida Panhandle early Monday with that region to the northern Florida Peninsula and Georgia to southern Virginia seeing the greatest rain, said World Weather Inc. today.
Hogs: October lean hogs gained 5 cents to $86.525 per hundredweight, down $1.0725 from a week ago. Fluctuating pork quotes this week likely have the pork industry concerned about the strength of autumn pork demand, especially with wholesale beef prices seeming set to challenge their greatly elevated June highs in the days ahead. Still, having primal ham values soar over 30 cents at noon today after having fallen rather sharply Thursday appeared to right the bullish ship. Still, it may be hard for nearby futures to avoid a bearish downdraft since hog slaughter has begun the usual late summer-autumn surge. Conversely, having the lean hog index still over $110.00 may make it difficult to force deeply discounted futures even lower.
Cattle: October live cattle futures fell 37.5 cents to $128.125 per hundredweight, up slightly from $127.875 a week ago, while October feeder cattle rose 15 cents to $165.775. Cattle futures may be poised for further gains next week if cash market fundamentals remain strong. Choice beef cutout values rose another $4.80 early today to $322.73 per hundredweight, the highest since June 18 and up 22% from a 3 1/2-month low reached in mid-July. Continued gains in the corn market may pressure feeder cattle. USDA’s next monthly Cattle on Feed report Aug. 20 will indicate whether the recent contraction in feedlot holdings continued in July. In its previous report, USDA reported cattle placed in feedlots for fattening in June at an estimated 1.67 million head, down 7.1% from the same month in 2020.
