After the Bell | August 10, 2021
Corn: December futures edged 1/2 cent lower to $5.53 1/4 per bushel in subdued, narrow-range trade ahead of USDA’s Aug. 12 Crop Production report. Corn came under pressure after stronger than expected weekly USDA crop ratings eased concern over dry conditions in parts of the Midwest. USDA yesterday reported the U.S. corn crop at 64% “good” or “excellent” as of Aug. 8, up from 62% a week ago and two percentage points above expectations. When USDA's weekly condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn rating was unchanged at 363.8 points, down 7.5 points from the five-year average. Crop consultant Michael Cordonnier left his average U.S. corn yield projection at 175.5 bu. per acre, citing greater confidence in the crop following weekend rains. USDA currently estimates the average yield at 179.5 bu. per acre.
Soybeans: November soybean futures climbed 7 cents to $13.36 3/4 per bushel. September soyoil rose 47 points to 61.19 cents a pound, while September soymeal rose 20 cents to $357.50 per ton. Early reports of export sales marked the fourth consecutive business day with sales to China and/or “unknown destinations” were announced. Also, the latest 6-10 day forecasts indicate significant heat and dryness ahead, a potentially troubling signal with the crop going through key development stages. USDA reported 60% of the soybean crop in “good” to “excellent” condition yesterday, unchanged from the previous week and down from 74% a year ago. That matched trade expectations, and also resulted in a 0.1-point decline in our CCI rating to 352.8 points, 7.6 points below average.
Wheat: December SRW wheat rose 14 1/4 cents to $7.39 1/2 a bushel and December HRW wheat rose 12 1/2 cents to $7.26, the highest closing price since $7.40 1/2 on May 7. September spring wheat rose 6 3/4 cents to $9.15 1/2. The winter wheat market is being fueled by notions of a bullish global supply and demand balance sheet through at least the end of this year. Thursday’s USDA Crop Production and Supply and Demand report is expected to show tighter U.S. and global supplies. However, history shows USDA does not usually make significant revisions in its wheat balance sheet numbers in its August reports. World Weather Inc. projected net drying the next seven days in the Northern Plains. The limited rainfall outlook, combined with warm temperatures, “will lead to a continuation of crop and livestock stress,” the forecaster said.
Cotton: December futures rose 142 points to 92.32 cents a pound, after reaching a contract high at 92.43 cents. Cotton futures extended a months-long rally despite improving crop condition ratings and expectations USDA’s first crop estimate Thursday will come in higher than the July projection. Traders are expecting that to push U.S. ending stocks higher than forecast last month. Traders also expect USDA to raise its global cotton ending stocks forecast from last month. Talk circulated about a demand boon for cotton as the world continues to rebound from the coronavirus pandemic, though increasing cases from the Delta Covid variant looms as a potential dark cloud over the demand picture.
Hogs: October lean hogs dropped 72.5 cents to $83.875, the lowest closing price since July 7. Hog futures extended a two-week tumble on expectations for a seasonal surge in hog supplies and slaughter rates. The usual seasonal breakdown has historically sent the hog market to substantially lower prices late in the year. Also, the CME lean hog index has eroded recently, falling yesterday by 44 cents to $110.77. Rising wholesale prices may help put a floor under futures eventually, especially in light of surging beef cutout values. Midday pork cutout values climbed $3.58 to $126.78, USDA reported.
Cattle: October live cattle rose 65 cents to $128.125 per hundredweight, after climbing as high as $129.20 earlier today. October feeder cattle rose 15 cents to $165.85. Live cattle futures rose for a second straight day as wholesale beef prices extended a three-week rally, reflecting scaled-up retail demand ahead of the Labor Day weekend holiday. Feeder futures trimmed early gains driven by weaker corn prices. Choice boxed beef values surged another $4.66 earlier today to $304.46, marking the 14th consecutive day of gains, according to USDA data. Boxed beef prices are up 15% since hitting a 3 1/2-month low July 20. This week’s cash trade has been quiet so far and yet to establish a firm direction. Live steer prices yesterday averaged $123.83, matching last week’s average.
