After the Bell | August 5, 2021
Corn: September futures rose 10 cents to $5.55 3/4, while December futures rose 6 1/4 cents to $5.53. Corn futures rose after USDA’s weekly export sales report showed stronger than expected new-crop sales. USDA reported net corn sales of 830,200 MT for the week ended July 29, over 200,000 MT above the high end of trade expectations. For 2020-21, net corn sales of 68,200 MT were down from the previous week but up “noticeably” from the prior four-week average, USDA said. China had net cancellations of 112,506 MT of old-crop corn purchases but took delivery of 909,500 MT during the week. The tally was in line with expectations. The near-term weather outlook remains favorable for crop development in most of the Midwest, but dryness persists in some areas. Today’s National Drought Monitor reflected ongoing drought degradation for northern and western areas of the Corn Belt.
Soybeans: November soybean futures rose 2 3/4 cents to $13.28 1/2 a bushel. Soymeal futures gained $3 to $4, while soyoil ended mostly around 68 to 85 points in October through December contracts. Soybean futures climbed after USDA announced a 300,000-MT daily soybean sale to unknown destinations – likely China or the European Union, indicating prices had dropped enough to spark overseas demand. Weekly export sales data was as-expected for both old- and new-crop. China had net sales reductions of 41,036 MT for 2020-21 but was a net buyer of 129,000 MT of new-crop soybeans during the week. Rains rolled across Iowa and other areas of the western Corn Belt today before breaking. Forecasts signal more rain is possible for Iowa, southeastern Minnesota, Wisconsin and northern Illinois this weekend and possibly again during the middle of next week.
Wheat: Spring wheat futures finished fractionally to a penny-plus higher, while winter wheat futures were mostly 2 to 4 cents lower. The bulk of the price action in wheat market today was spreading, as traders added to long spring wheat/short winter wheat spreads. The spring wheat market remains supported by severe crop damage in the Northern Plains and Canadian Prairies. Weekly wheat export sales, at 308,300 MT, were below the bottom end of pre-report estimates, down 40% from the previous week and down 28% from the four-week average. While global wheat crop estimates are declining, end-users aren’t panicking, but rather are being selective buyers of U.S. supplies. Unless that changes, the demand side of the market will provide limited support.
Cotton: December cotton futures settled 37 points higher at 90.68 cents, after rising within 10 points of the contract high. Cotton futures rose for the fourth consecutive day behind strong demand fundamentals and a surge in grain futures. USDA reported net weekly cotton sales of 149,300 running bales (RB) for the 2021-22 marketing year and exports of 229,500 RB, down 4% from the previous week and down 5% from the average for the previous four weeks. For 2020-21, net sales totaled 17,100 RB. Accumulated exports for the current marketing year are still running 56% ahead of last year’s levels, and the cotton market’s consistent march higher for the past three months indicates traders expect global demand will be more than sufficient to absorb what’s expected to be a generally healthy U.S. harvest.
Hogs: Hog futures plunged in the wake of sharp declines in wholesale pork prices. October futures plunged the $3.00 daily limit to $87.125. Lean hogs will trade with expanded limits of $4.50 tomorrow. Pork cutout values sank $4.68 yesterday before rising 13 cents today, to $123.12, which was still a decline of nearly 4% over the past two days, USDA reports showed. The wholesale market weakness contradicted expectations that climbing beef prices would accelerate grocer demand for cheaper pork. Some traders may also have taken the view that the fourth-quarter contracts were substantially overpriced despite supportive fundamentals, such as vigorous demand and a projected 3% annual reduction in fall hog slaughter. The fact that the October and December contracts are trading far above autumn 2016-20 levels may also have spurred the aggressive selling.
Cattle: October live cattle futures fell $1.40 to $127.575, while October feeder cattle fell $1.60 to $163.85. Live cattle fell as USDA reported weaker export sales and hog futures sold off. Still, cattle futures remain up for the week, underpinned by resurgent beef prices. Feeder cattle futures fell after corn prices rallied behind stronger than expected exports. The wholesale beef market extended its recent rally, with choice cutout values up $2.68 this morning to $292.02, the highest since late June, according to a midday USDA report. Choice cutout values have gained for 12 straight days, with Select also marching higher. Live steers averaged of $123.31 early today in top U.S. feedlot areas, up from last week’s average of $121.68, based on USDA reports.
