After the Bell | August 24, 2021
Corn: Futures gained for the first day in four, with the December contract up 9 3/4 cents to $5.45 1/4 a bushel. Corn rebounded from yesterday’s drop to six-week lows, gaining a boost from USDA’s weaker than expected crop ratings yesterday and a second straight daily export sale to Mexico today. Earlier today, USDA reported Mexico purchased 123,500 metric tons (MT) of U.S. corn for delivery during the 2021-22 marketing year. That announcement came a day after USDA reported a sale of 458,600 MT of U.S. corn for delivery to Mexico during 2021-22. For the marketing year through Aug. 12, U.S. corn exports to Mexico totaled 14.1 million MT, up 5.2% from the same period the previous year and comprising nearly 22% of total U.S. corn exports. USDA, in its weekly crop condition report yesterday, listed 60% of the U.S. corn crop in “good” or “excellent” condition at the start of this week, down from 62% a week ago. Analysts on average expected a good-to-excellent rating of about 61%.
Soybeans: November beans jumped 39 cents to $13.31 3/4 per bushel, while September soyoil surged 1.84 to 61.09 cents per pound and September soymeal climbed $8.30 to $354.9 per ton. News of another soybean sale to China, along with strength spilling over from resurgent crude oil futures sent the soy complex higher. Also, USDA reported the good-to-excellent reading for U.S. soybeans fell to 56% from 57% a week earlier, underscoring beliefs that last week’s Midwest rains came too late to substantially boost fall harvest yields. Crude oil futures rallied over 2%, providing spillover strength in the soy complex. Ultimately, bulls had to be encouraged by indications last week’s price slide prompted a quick, aggressive return of Chinese buyers to the U.S. export market.
Wheat: December SRW wheat fell 1 1/4 cents to $7.32 1/4 a bushel. December HRW wheat fell 1/4 cent at $7.17 1/4 and December spring wheat rose 5 cents to $9.10 3/4. Wheat markets couldn’t muster the strength seen in corn or soybeans today, but bulls remained encouraged by solid near-term price uptrends and export prospects. World Weather Inc. today reported Canada’s Prairies continue to receive periodic rainfall and relief from dryness has been and will continue to occur in many areas. That likely limited buying interest in futures. While the drought is not over, the rains are benefiting late-season crops. Northern U.S. Plains drought relief is expected to be more limited. The U.S. spring wheat crop was 77% harvested as of Aug. 22, up from 58% the previous week, USDA reported yesterday. That’s higher than trade expectations of around 74%.
Cotton: December cotton rose 82 points to 94.18 cents a pound. The cotton market continues to show resilience, though recent CFTC data shows speculators hold a historically high long position, which could be an early clue that a corrective price pullback may be ahead. USDA yesterday reported the U.S. cotton crop was 97% squaring and 79% setting bolls, with 14% of bolls open. At the start of this week, USDA rated the crop at 71% in good-to-excellent condition, among the highest-ever ratings for this period. While the U.S. is expected to produce a bountiful cotton crop, USDA export sales continue to be solid and that’s helping to keep prices elevated.
Cattle: October live cattle futures fell 25 cents to $131.70, erasing an early climb to a contract high at $132.85. October feeder cattle fell 45 cents to $170.225. Live cattle futures showed followthrough buying after yesterday’s rally, through the October contract ran into some profit-taking. The late pullback is probably just a modest correction for now, but there are rumblings in the market the cash and product markets could be near short-term tops. Choice beef cutout values were unchanged this morning, near the highest levels since May 2020, while Select dropped $1.57. Given the surge in wholesale prices, traders are on watch for a short-term top with Labor Day features completed. Any near-term retailer demand is likely to be fill-in buying following the holiday. Initial cash cattle trade started in the northern market at steady to slightly weaker prices than last week, while trade began around steady levels in the Southern Plains.
Hogs: October hog futures fell 50 cents to $86.975 per hundredweight, after falling as low as $86.05, the lowest intraday price since $84.50 on Aug. 13. The ongoing slump in wholesale pork burdened futures, and the market seemed disappointed in USDA latest monthly Cold Storage report, which showed estimated total U.S. pork stockpiles at 443.1 million pounds as of July 31, up slightly from a month earlier but down 3.8% from the same date in 2020. However, bullish traders seemed seized on an increase of 22.1 million pounds in ham inventories, which may undercut ideas that tight frozen supplies would limit seasonal hog price declines over the autumn. Pork carcass cutouts today averaged $111.01 per hundredweight, down $2.25 on the day and the lowest daily price since $110.04 on June 25, USDA reports showed.
