After the Bell | August 6, 2021
Corn: December futures advanced 3 1/2 cents to $5.56 1/2 a bushel, up 11 1/4 cents from last Friday’s close. Trade focus shifted to USDA’s Crop Progress report Monday and its Aug. 12 Crop Production report, which will be key to market direction in late summer. U.S. farmers are expected to harvest 14.971 billion bu. of corn this year, based on the average analyst estimate in a Bloomberg survey. By contrast, USDA currently projects the crop at 15.165 billion bu. History suggests that “normal” August weather will reduce chances of a short corn crop this fall, which in turn will render prices vulnerable to seasonal weakness.
Soybeans: Soy complex futures ended mostly higher, with November soybeans up 8 1/4 cents to $13.36 3/4 a bushel, down 1% for the week. December soybean meal rose 40 cents to $357.70 a ton and December soyoil rose 41 points to 61.27 cents a pound. Soybean futures rose for a third consecutive day on recent export business and ongoing concern over dry soils in parts of the Midwest. Futures held within narrow ranges during the second half of the week as trade focus shifted to the Aug. 12 USDA Crop Production report, which is expected to show slightly smaller harvest prospects than USDA previously forecast. U.S. farmers will harvest 4.362 billion bu. of soybeans this fall, based on the average analyst estimate in a Bloomberg survey. USDA currently projects the crop at 4.405 billion bushels.
Wheat: September SRW futures rose 6 1/4 cents to $7.19 a bushel, up 2.2% from $7.03 3/4 at the end of last week. September HRW rose 14 1/4 cents to $7.05 3/4, up from $6.73 1/4 a week ago, while September spring wheat gained 12 1/2 cents to $9.16 1/4. Winter wheat futures ended the week near three-month highs amid expectations for stronger exports and smaller global stockpiles. Trade focus late this week shifted to the Aug. 12 USDA Crop Production and Supply and Demand reports, which are expected to reflect a tightening U.S. and global supply picture. USDA is expected to trim U.S. wheat ending stocks for 2021-22 to 644 million bushels, based on the average analyst estimate in a Reuters survey. That would be down from USDA’s current estimate of 665 million bushels.
Cotton: Trader optimism about cotton demand strength seemingly powered the cotton market to fresh summer highs Friday. The most-active December contract surged 1.02 cents higher to close at 91.70 cents a pound. That marked a weekly gain of 2.31 cents. The current outlook for the fall U.S. cotton harvest looks quite promising, especially with Texas weather looking very supportive of the crop and likely to greatly reduce abandonment in that region (which is unusual). Yet, futures broke out to new highs Friday, with the underlying implication that the industry is very optimistic about demand prospects in the 2021-22 crop year. Traders will focus upon Monday’s Crop Progress and Thursday’s Export Sales reports from USDA. But they will also be watching USDA’s August Crop Production and WASDE reports set for release Thursday at 11:00 a.m. CDT. Any surprises could spark a futures reaction.
Hogs: August lean hog futures fell 72.5 cents to $108.75 per hundredweight, while October lean hogs rose 47.5 cents to $87.60, down from $88.025 at the end of last week. Futures rallied late today after earlier sinking to the lowest levels in nearly four weeks, pressured by a sharp mid-week drop in wholesale pork prices. Carcass cutout values surged $5.60 today to $128.72 per hundredweight, up 4% from $123.12 at the end of last week, USDA reported. The jump in cutout values appeared to have stabilized hog futures today, and cutouts will be one key to market direction next week.
Cattle: August futures edged up 42.5 cents to $123.00 per hundredweight, while most-active October added 30 cents to $127.875, up 67.5 cents for the week. Wholesale beef prices extended a recent upswing, jumping $3.15 early today to $295.73, the highest since late June. Retail demand will be key to market direction in coming weeks as grocers prepare for Labor Day weekend grilling demand. While retail buying may slow later this month, feedlot inventories are running 1% to 2% below year-ago levels even as meatpackers ramp up slaughter. That suggests cattle are being pulled out of feedlots early, meaning market-ready supplies may be tightening, a potentially supportive development for the late-summer market.
