After the Bell | August 25, 2021
Corn: December futures rose 6 1/2 cents to $5.51 3/4 a bushel. The corn market extended yesterday’s corrective gains as traders moved futures back near the middle of the broad summer trading range. The $5.50 area continues to be the comfort zone for traders – prices too far below that level have attracted buyers and rallies above that level have been short-lived. Weather is a mixed bag. Some areas have received recent rains, but along with them have come localized crop damage due to high winds and hail. Other areas have stayed dry. Crop condition ratings are declining but traders may not aggressively alter their positions until USDA’s Sept. 10 Crop Production Report. Tomorrow’s weekly export sales report is expected to show old-crop sales between -100,000 MT and 250,000 metric tons (MT), with new-crop sales between 500,000 MT and 1 MMT.
Soybeans: November soybean futures fell 1 cent to $13.32 3/4 a bushel, after rising to a high for the week so far at $13.39 1/2 earlier. December soymeal fell $2.90 to $352.80 a ton and December soyoil rose 69 points to 61.30 cents per pound, the highest close in a week. The soy complex faced mild profit-taking pressure following yesterday’s strong gains, though the market lacked conviction in either direction and traded within the ranges of the past week or so. Traders continued to watch for additional potential export business from China. Since the beginning of August, USDA reported over 2.5 MMT of U.S. soybean sales to either China or “unknown destinations.” Parts of the Midwest, including central Minnesota and southeast Iowa, received beneficial rains over the past day, World Weather Inc. reported. Any rains at this point could help soybeans in pod-filling and other late development stages.
Wheat: December SRW futures fell 6 3/4 cents to $7.25 1/2 per bushel. December HRW wheat slid 2 1/4 cents to $7.15, while December spring wheat fell 2 3/4 cents to $9.09 3/4. The 2021 harvest is close to wrapping up, so wheat futures should not face much cash pressure, especially with corn and soybean prices holding up well. Also, it’s not at all uncommon for winter wheat futures to “bid for acreage” at this time of year with fall seeding ahead. Wire service reports also indicated the wheat industry is concerned about the strength of export demand for U.S. wheat. As pointed out in the past, the emergence of the Black Sea region as a major source of comparatively cheap wheat (with shorter and cheaper logistics) has handicapped U.S. wheat exports in recent years. Traders will monitor tomorrow’s weekly USDA export sales report.
Cotton: December futures rose 32 points to 94.50 cents per pound. Despite anticipation of a strong fall harvest, cotton futures remain elevated, with the December contract within striking range of the psychologically important 95-cent level. Today’s rise may have represented a response to concerns about the cotton crop in southern Texas and in the Southeast due to a tropical storm developing in the Caribbean later this week. The storm could develop into a hurricane that moves into the region and damage unpicked cotton in the bolls. Strong afternoon trade may have reflected industry optimism about the likely outcome of tomorrow’s weekly USDA export sales report. Vigorous cotton demand has been the bulwark of the ongoing price rally.
Cattle: October live cattle fell $1.40 to $130.30 per hundredweight, while October feeder cattle fell 95 cents to $169.275. Cattle fell under profit-taking pressure after hitting contract highs yesterday. While the overall cash market fundamentals are still friendly for the cattle markets, one potential negative: average steer dressed weights, at 896 pounds per head, are significantly above the five-year average, despite the addition of last year's elevated figures to the five-year average. Choice beef cutout values fell 7 cents at noon today, to $347.51, after gaining over 30% the past five weeks. Beef demand may be poised for a decline as retailers finish purchases ahead of the Labor Day holiday weekend. An estimated 353,000 head of cattle have been slaughtered during the first three days this week, down 7,000 head from the same period a week ago but up 1,000 from the same period a year ago, USDA reported.
Hogs: October lean hog futures jumped $1.775, or 2.3%, to $88.75 per hundredweight, while December hogs rose $1.175 to $81.95. Futures bounced back after yesterday’s drop to near two-week lows, though the market struggled for firm direction and slumping wholesale pork prices continue to hang over the market amid questions over retail demand and the prospect of higher supplies this fall. Pork carcass cutouts early today averaged $111.01, down 39 cents from yesterday and the lowest daily price since $107.82 on June 23, based on USDA reports. Carcasses on national direct markets early today ranged from $89 to $101, compared to yesterday’s average of $96.82. The latest CME lean hog index was $107.90, still above cash market. Meatpackers slaughtered an estimated 1.384 million head the first three days this week, down 3.0% from the same period last week and down 3.4% from the same period in 2020.
