After the Bell | December 1, 2021
Corn: March corn futures rose 4 cents to $5.71 1/2, up from yesterday’s three-week closing low. Corn futures saw a corrective, short-covering bounce as easing concern over the Omicron coronavirus variant contributed to strength in crude oil and other markets. Strong domestic ethanol demand continues to underpin corn prices. During the holiday-shortened week ended Nov. 26, U.S. ethanol production declined 44,000 barrels per day (bpd) to 1.035 million bpd, the lowest weekly number since the week ended Oct. 8. Ethanol stocks rose 137,000 barrels, to 20.301 million barrels. For the previous four weeks, production average 1.053 million bpd, still among the four top four-week averages this year. Tomorrow’s weekly USDA export sales report is expected to show net U.S. corn sales at 600,000 to 1.25 MMT for the week ended Nov. 25. The previous week, corn sales totaled 1.429 MMT, up 40% from the average for the previous four weeks and a marketing year high.
Soybeans: January soybeans rose 11 cents to $12.28 1/4 per bushel, up from yesterday’s drop near three-week lows. January soybean meal surged $7.30 to $349.10 per ton and January soybean oil fell 3 points to 55.18 cents per pound. Soybean futures rebounded from yesterday’s steep declines on corrective buying and ideas the price downturn may stir fresh export business. Late today, USDA, in its monthly Fats and Oil report, said U.S. processors crushed 5.91 million short tons of soybeans during October, up 20% from September and up 0.2% from October 2020. The latest figure surpassed trade expectations for October crushings around 5.868 short tons, based on a Reuters survey. USDA’s export sales report tomorrow is expected to show net U.S. soybean sales ranging from 800,000 MT to 1.8 MMT for the week ending Nov. 25. The previous week, net sales totaled 1.565 MMT, up 13% from both the previous week and the prior four-week average.
Wheat: March SRW wheat futures rose 3 1/4 cents to $7.90 1/2 and nearer the session low. March HRW wheat fell 3 cents to $8.19 1/4. March spring wheat futures rose 9 3/4 to $10.19 3/4. Wheat futures stabilized amid ongoing concern over tightening global supplies. Much of the U.S. hard red winter wheat region had little to no rain in November, including a majority of the Texas Panhandle and southeastern Colorado. Dryness in western production areas has worsened and the situation is not likely to change much in December. Well-above-average temperatures have also kept soil temperatures warm enough prevent dormancy in some areas, such as central Oklahoma. Tomorrow’s weekly USDA export sales report is expected to show net U.S. wheat sales at 250,000 to 600,000 MT for the week ending Nov. 25. In last week’s report, net U.S. wheat sales of 567,500 MT were up 42% from the previous week and up 70% from the average for the previous four weeks.
Cotton: March cotton futures fell 222 points to 104.19 cents per pound, the lowest closing price since 104.15 cents on Oct. 21. The market’s chart breakdown this week sends a strong signal that this year’s bull run may running out of gas. With nearly all the U.S. crop harvested, trade focus is shifting to demand. While last week’s USDA export sales, at 196,900 bales, was a big improvement over previous weeks, shipments of just 97,100 bales were discouraging. Today’s declines in part may have reflected expectations for another weak export sales figure Thursday. Ideas that elevated prices will encourage millers to switch from cotton to manmade fibers are a longer-term concern, as are suspicions that U.S. farmers will greatly increase their 2022 plantings.
Cattle: February live cattle gained 70 cents to $138.60. January feeder cattle rose 97.5 cents to $165.825. Cattle futures bounced from yesterday’s declines but struggled to maintain early strength. Light cash trading was reported early this week, with live steers in top feedlot areas today averaging $137.84, down slightly from last week’s average of $138.17, a 4 1/2-year high. However, Choice cutout values fell $1.46 today to an average of $270.22, extending the market’s slide to four-month lows and potentially signaling another leg down in the wholesale market. Despite the wholesale market’s weakness, gains in live cattle futures today suggests solid underlying strength, reflecting tighter supplies of market-ready fed cattle into 2022. We expect more short-term sideways-to-lower price action, due in part to packers’ fresh access to fed cattle contracted for December delivery, but we remain bullish on the winter-spring price outlook.
Hogs: February lean hogs rose 15 cents to $80.125, up from yesterday’s drop near a two-week low. Most deferred contracts ended slightly lower. Hog futures fell on followthrough technical pressure from yesterday’s drop and continued weak cash fundamentals. Tomorrow's CME Lean Hog Index is expected to rise 23 cents to $70.27, up from a 10-month low previously and $3.355 under December futures, which settled today at $73.625. Pork cutout values today fell $4.33 to an average of $82.37, the lowest since Feb. 3. Still, movement today was nearly 358 loads, which, combined with the 775 loads moved the first two days this week, suggests retail demand may be picking up at lower prices. Slaughter so far this week was an estimated 1.443 million head, up 17,000 from the same period during last week’s holiday-shortened schedule.
