After the Bell | August 12, 2021
Corn: December futures settled 14 cents higher at $5.73 1/4, a six-week high, following USDA’s lower-than-expected U.S. harvest and yield estimates. USDA surprised the marketplace with an unexpectedly large 2.7% cut in its forecast for U.S. corn production, indicating that persistent dryness in parts of the Midwest has taken a bigger toll on the crop than previously thought and tightening the global supply outlook. U.S. farmers will harvest an estimated 14.75 billion bu. of corn this fall, USDA said in its first survey-based forecast of the crop. That’s down from the previous, trendline-based estimate, at 15.165 billion bu. The estimated nationwide average yield, at 174.6 bu. per acre, is down 4.9 bu. from USDA’s trendline projection. Also today, USDA raised its old-crop corn ending stocks estimate by 35 million bu. from last month and hiked projected food, seed and industrial use by 40 million bu.
Soybeans: November soybeans rose 1 cent to $13.41 a bushel after fading from a post-USDA report rally. December soybean meal closed up $2.00 at $358.50 per ton and December soyoil closed down 2 points at 61.58 cents per pound. USDA’s Crop Production and Supply and Demand reports were considered neutral to bullish for the soy complex. today. The agency pegged U.S. soybean production at 4.339 billion bu., lower than the average trade estimate of 4.375 billion bu. and down from 4.405 billion bu. USDA forecast in July. USDA estimated the national average soybean yield at 50.0 bu. per acre, 0.8 bu. below the previous forecast, and boosted its old-crop soybean ending stocks projection by 25 million bu. from July.
Wheat: Winter wheat futures soared over 3% and closed at the highest levels in over three months on USDA’s smaller-than-expected crop estimates. September SRW futures rose 26 1/2 cents to $7.53 1/2 a bushel and September HRW jumped 28 1/2 cents to $7.38 3/4. September spring wheat rose 19 3/4 cents to $9.32 3/4. USDA’s Crop Production and Supply and Demand reports reinforced a shrinking global supply outlook and the effects of adverse weather in the U.S. and other top producers. Estimated all U.S. wheat production was lowered a larger-than-expected 2.8% to 1.697 billion bu., a 19-year low. For winter wheat, USDA cut its estimated U.S. crop to 1.319 billion bu., down 3.3% from last month’s forecast and below the average analyst estimate of about 1.363 billion bu. USDA also lowered projected 2021-22 U.S. new-crop wheat carryover by 38 million bu. and lowered total supply by 49 million bu.
Cotton: December cotton rallied 210 points to 93.32 cents per pound, after earlier reaching a contract high at 93.85 cents. USDA projected the U.S. cotton crop at 17.264 million bales, lower than the average trade expectation of 18.150 million bales. The average U.S. cotton yield was cut to an estimated 800 lbs. per acre, down 47 lbs. per acre from last month. USDA also lowered its harvested acreage by 140,000 acres from July, to 10.36 million acres, and cut its new-crop cotton ending stocks estimate by 300,000 bales from July. Estimated new-crop cotton exports were reduced by 200,000 bales.
Hogs: October lean hogs rose 62.5 cents to $86.475 per hundredweight, while the December contract rose $1.00 to $79.90. Hog futures rose for a second day in a row in a continued technical bounce from a recent slump to six-week lows. USDA’s latest Supply and Demand report held bearish implications for the hog market, as the agency lowered its estimate for 2021 U.S. pork exports by 1.9% to 7.41 billion pounds. Projected 2022 exports were cut 3.3%, to 7.3 billion pounds. Also today, USDA reported net weekly U.S. pork sales totaling 14,600 MT, down 62% from the previous week and 48% from the prior four-week average. Carcass cutout values today tumbled $4.59 to $119.37, the lowest since July 14, according to USDA reports. Movement totaled about 279 loads.
Cattle: October live cattle futures rose 92.5 cents to $128.50 per hundredweight amid strong cash fundamentals, while October feeder cattle rose 32.5 cents to $165.625. Choice beef cutout values extended a recent surge, rising another $7.13 today $317.93, to the highest levels since June 21. Live slaughter-ready steers in five top feedlot regions averaged $122.35, down from last week’s average of $123.83 but still up over 20% from year-ago levels. Producers appear to be digging in on their asking prices as the wholesale market climbs, determined to be greater participants in the beef price rally. Feeder cattle futures took pressure from gains in the corn market, which rallied after USDA cut its U.S. harvest outlook by a larger than expected 2.7%.
