After the Bell | August 27, 2021

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Corn: December futures rose 3 cents to $5.53 3/4 a bushel, a gain of 3.1% from $5.37 at the end of last week. Corn futures recovered late today after declining early following beneficial rainfall in Iowa, Minnesota and other key growing areas of the Midwest over the past few days. Regular showers are expected in the Midwest over the next week, “bringing additional relief from drought in the northwest while maintaining mostly favorable crop conditions elsewhere,” World Weather Inc. said today. But weather is increasingly of little consequence for the corn market as the growing season nears its end. U.S. exports and global supply and demand dynamics will come into greater focus in the coming weeks. Early today, USDA reported a sale of 150,000 metric tons (MT) of corn to Colombia for 2021-22 delivery.

Soybeans: November soybean futures fell 3 cents to $13.23 1/4 and for the week rose 32 1/2 cents. December soybean meal futures fell $3.50 to $352.40 per ton and December soybean oil futures rose 31 points to 60.34 cents per pound. Rains across much of the Corn Belt this week will likely give a late-season boost to soybean yield potential. More rain is expected in the region into next week. However, the southwestern Belt is expected to see net drying for the next seven to 10 days. Soybean traders next week will also be looking for more daily U.S. bean sales announcements, especially to China. USDA today reported a sale of 129,000 MT of soybeans to China for 2021-22 delivery. So far in August, the agency reported U.S. bean sales totaling about 3 million MT to China or unknown destinations.

Wheat: December SRW futures fell 6 3/4 cents to $7.32 1/2 per bushel, but still rose 4 1/4 cents on the week. December HRW futures fell 4 1/4 cents to $7.24, an 8 1/4-cent weekly advance. December spring wheat futures rallied 6 1/4 cents to $9.17 3/4, up 15 cents from last Friday. Winter traders seemed reluctant to push prices higher ahead of the weekend after having apparently shrugged off disappointing export data on Thursday. Recent rains and forecasts for more of the same may undercut SRW and HRW prices if the industry revises its fall planting estimates upward as a result. The winter wheat markets are likely looking forward to the forthcoming planting/growing season at this point, with the seeming shift toward a wetter pattern in the Northern Plains potentially boosting prospective plantings in that region during the weeks ahead.

Cotton: December futures advanced 68 points to 94.84 cents, up 1.74 cents from last Friday. The possibility that Tropical Storm Ida will reach Hurricane status by the time it makes landfall in southern Mississippi Monday night and cause significant damage to the Southeast’s cotton crop supported prices. Traders may pay little attention to Monday’s weekly Crop Progress report, especially if Ida develops into a particularly strong storm. A weaker than expected Ida could undercut futures. Industry focus will later shift to USDA’s weekly export sales report, which has consistently showed robust sales and shipments to overseas customers.

Cattle: October live cattle fell 47.5 cents to $129.125 per hundredweight, up marginally from last’s Friday settlement at $129.05 for the contract’s seventh consecutive weekly gain. October feeder cattle rose 15 cents to $168.425, up from $167.625 at the end of last week. Live cattle futures tumbled from contract highs early this week amid growing beliefs wholesale beef prices established a peak, with retailers wrapping up purchases ahead of the Labor Day weekend. USDA reported choice beef cutout values fell $1.58 early today to $345.69, up 63 cents from a week ago, but down from the 15-month highs hit earlier in the week. Traders will watch cutout values closely in the coming week for further evidence of a market top. Retail demand seems poised to back off a bit as the summer grilling season ends, though overall beef demand remains relatively robust and prices for slaughter-ready cattle climbed over the past week.

Hogs: October lean hog futures rose $2.825 to $90.725 per hundredweight, the highest closing price since $91.375 on Aug. 3. For the week, October hogs gained $2.10. Today’s strong gains resulted in a bullish weekly high close, potentially setting up follow-through buying interest Monday. The late-week rebound in wholesale pork prices should also support the market early next week. Early today, carcass cutout values rose $2.82 to $118.15 on good movement of 214.24 loads. Values are still below the June peak at $134.94. On a national direct basis, cash hog prices today averaged 89 cents lower. October lean hog futures are still trading at close to a $15 discount to the CME lean hog index ($104.79), which is at the lowest level since April. That indicates seasonal price pressure in the weeks ahead due to bigger hog supplies coming to market.

 

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