After the Bell | August 2, 2021
Corn: Futures ended 11 to 13 cents higher through July 2022 contracts, with December futures rising 14 cents to $5.59 1/4 a bu., the highest closing price since July 22. Corn futures erased overnight losses, lifted by stronger than expected USDA export numbers and spillover from the wheat markets’ rally to the highest levels in nearly three months. USDA today reported 1.384 million metric tons (MMT) of U.S. corn was inspected for export for the week ending July 29, stronger than expectations for 900,000 MT to 1.2 MMT. Also today, USDA said it rated 62% of the U.S. corn crop in “good” or “excellent” condition at the start of this week, down from 64% a week ago and below analysts’ expectations for 63%, based on the average estimate in a Reuters survey. USDA’s Grain Crushings report showed 439.9 million bu. of corn was used for ethanol production during June, slightly under trade expectations.
Soybeans: Futures finished mostly 4 to 5 cents higher today. Soymeal futures ended $4.60 to $5.70 higher through the December contract. Soyoil finished 45 to 120 points lower through the December contract. Forecasts suggest temperatures will be rather moderate over the next 10 days across the Midwest, with rains likely to favor areas outside of the dry northwestern locations. However, current weather model runs suggest even the dry areas could get some rains. Weekly soybean export inspections, at 181,193 MT, were again shy of the needed pace to hit USDA’s forecast. Also today, USDA reported 60% of the U.S. soybean was in “good” or “excellent” condition at the start of this week, up from 58% a week ago and stronger than analyst expectations for 57%.
Wheat: Winter wheat futures led today’s strong price rally in the wheat complex. HRW futures finished around 30 cents higher in the most actively-traded contracts. SRW futures posted gains of 25 to 26 cents. Spring wheat futures ended 18 to 20-plus cents higher. A major cut to the Russian wheat crop forecast by SovEcon ignited buyer interest in the wheat market today. Russia is the world’s largest wheat exporter, so the sharp cut to its production forecast spurred ideas of potential increased export demand for U.S. winter wheat. The spring wheat market was a clear follower today, though buyer interest perked up late. The drought-related crop woes in the Northern Plains and Canadian Prairies are well known and largely factored into the market.
Cotton: Cotton futures settled 24 to 35 points higher through the July 2022 contract, with the most-active December cotton futures up 24 points to 89.63 cents a pound. Cotton rose with help from stronger U.S. stocks earlier today, U.S. dollar weakness and spillover from a rally in wheat markets, which reached the highest levels in nearly three months. Dry conditions in some key U.S. cotton areas and lagging crop development remain a concern with the crop undergoing critical development phases in August. For top U.S. cotton producing areas, weather conditions changed little over the weekend, World Weather Inc. said today, though “there will be less rain in West Texas this week,” the forecaster said in a report. USDA’s crop progress update today showed 60% of the crop in “good” or “excellent” condition, down from 61% a week ago.
Hogs: Lean hog futures finished high-range with gains of $1.225 to $1.475 through the February contract. Hog futures rebounded after last week’s poor performance. Support came from the big discounts futures hold to the cash index. August hogs finished at $107.50 today, $4.54 below where the cash index will be quoted tomorrow (as of July 30). That’s a sizable discount given that the index hasn’t dropped more than 18 cents the past five days. The average national direct cash price was 66 cents lower this morning, but the pork cutout value firmed $2.60, signaling there’s still plenty of retailer demand, despite the elevated prices. The strength in wholesale pork prices is also keeping packer margins solidly in the black, which should limit near-term downside risk for cash hog prices.
Cattle: August live cattle futures rose 5 cents to $122.125 per hundredweight, while October live cattle rose 7.5 cents to $127.275. September feeder cattle rose 17.5 cents to $161.975. Live cattle futures rose for the first time in three days on support from firm cash market fundamentals, including continued strength in wholesale beef. Beef demand has been solid and supplies are relatively tight, even as meatpackers step up slaughter. Choice cutout values earlier today averaged $278.81, up 35 cents from last Friday and the ninth consecutive daily gain since the market hit a 3 1/2-month low in late July. Live steers in top feedlot regions averaged $121.05 to end last week, down from the previous week’s average of $120.77.
