After the Bell | August 23, 2021
Corn: December futures fell 1 1/2 cent to $5.35 1/2 a bushel, after earlier hitting a six-week low. Prices firmed on corrective trade overnight, but buyer interest dried up during the day, despite supportive outside markets and a daily corn sale to Mexico. Traders remain nervous over what EPA might propose as biofuels mandates for 2021 and 2022 after multiple wire service reports last Friday, and the uncertainty is prompting funds to dump some long positions. Corn inspected for export totaled 28.5 million bushels for the week ending Aug. 19, USDA reported earlier today. Inspections were within trade expectations, but below the pace required to hit USDA’s export forecast of 2.775 billion bu. for the current marketing year. After today’s close, USDA reported the U.S. corn crop in 60% “good” or “excellent” condition at the start of this week, down from 62% a week ago and at the low end of expectations.
Soybeans: November soybeans rose 2 cents to $12.92 3/4 a bushel, December soybean meal fell $7.20 to $347.70 and December soyoil gained 191 points to 58.56 cents a pound. Spreaders bought soyoil and sold soymeal as the Nymex crude futures surged over 5%, suggesting oil may be establishing a bottom. Midwest weather has been generally good this month, and recent, beneficial rains in the dry northwestern areas will help. Following last week’s annual Pro Farmer Crop Tour, we estimated the U.S. soybean crop at 4.436 billion bu. on a national average yield of 51.2 bu. per acre. USDA projects soybean production at 4.339 billion bu. and average yield at 50 bu. per acre. USDA today reported the U.S. soybean crop in 56% good-to-excellent condition at the start of this week, down from 57% a week ago and meeting trade expectations.
Wheat: December SRW wheat futures rose 5 1/4 cents to $7.33 1/2 a bushel and December HRW rose 1 3/4 cents to $7.17 1/2. December spring wheat rose 3 1/2 cents to $9.05 3/4. Wheat rebounded from last week’s price tumble as the U.S. dollar weakened, crude oil rallied and USDA’s weekly export inspections report surpassed trade expectations for wheat. USDA reported 687,854 MT of wheat was inspected for export during the week ending Aug. 19, up from 560,640 MT the previous week and higher than trade expectations ranging from 300,000 to 575,000 MT. USDA also made a big upside revision to the previous week’s tally. For the current marketing year to date, wheat inspected for export totaled 5.66 million MT, 9.1% below the pace from the same period last year. The U.S. spring wheat crop was 77% harvested at the start of this week, up from 58% the previous week, USDA reported today. That’s higher than trade expectations of about 74%.
Cotton: December cotton rose 26 points to 96.36 cents per pound. Cotton futures rose for a second day in a row as crude oil soared, the U.S. dollar weakened slightly and the S&P 500 index scored another record high, suggesting growing confidence the economy will weather the recent upswing in Covid-19 cases. While the U.S. is expected to produce a large harvest, USDA export sales reports continue to reflect solid overseas demand. The U.S. cotton crop was developing at a slightly slower pace compared to recent history. USDA today reported 14% of the crop had bolls opening at the start of this week, up from 10% the previous week but below the 19% average for the previous five years. The crop was 71% in good-to-excellent condition, up from 67% the previous week.
Cattle: October live cattle rose $2.90 to $131.95 per hundredweight after reaching a contract high at $132.625, while August futures settled at the highest price for a nearby contract since January 2020. October feeder cattle rose $3.05 to $170.675. Choice beef values rose another $3.10 this morning to $348.16 per hundredweight, the highest since the pandemic-driven spike in May 2020, based on USDA reports. Product market gains have far outpaced those of the cash market amid ample market-ready supplies. Cattle traded at an average price of $125.47 last week, which was up $2.19 from the week prior. USDA, in its Cattle on Feed Report Friday, estimated 1.739 million head of cattle were placed in feedlots for fattening during July, down 8.1% from the same month in 2020 and a slightly larger drop compared to trade expectations. USDA’s Cold Storage report today showed U.S. beef supplies as of July 31 at 401.3 million pounds, down from 401.5 million a month earlier and down 8.8% from a year earlier.
Hogs: October lean hog futures fell $1.15 to $87.475 per hundredweight. A weakening fresh pork market, which sank near two-month lows, and a drop in cash hog prices burdened futures. Carcass cutout values tumbled $6 to $113.26 per hundredweight, led by drops of over $12 in primal hams and nearly $16 in primal bellies, a USDA report showed. Movement was about 172. loads. Cash hogs on a national direct basis were down $3.67 today at $95.75. USDA monthly Cold Storage Report today showed U.S. total pork supplies as of July 31 at 443.1 million pounds, up slightly from a month earlier but down 3.8% from the same date in 2020. Belly supplies, at 27.7 million pounds, were down 35% from the end of July a year earlier.