After the Bell | December 3, 2021

Corn: March corn futures rose 7 1/4 cents to $5.84, the highest closing price since Nov. 26 but still down 7 3/4 cents for the week. Today’s high-range and bullish weekly high close sets the table for some follow-through technical buying strength early next week. Recent solid demand from U.S. ethanol producers is an underlying positive element for the corn market, with margins at the highest levels in over seven years. USDA next monthly Supply and Demand report Dec. 9 is not expected to show any big changes from last month. Slack U.S. corn exports remain a concern for market bulls. It’s likely that wheat futures prices need to rally further for corn futures to rise much higher from present levels. If wheat futures prices do top out, which we believe is the case, or close at hand, then its’ likely corn futures prices would languish. Any rallies to near $6.00 in corn futures would be selling opportunities.

Soybeans: January soybeans futures surged 23 cents to $12.67 1/4, a gain of 1.2% for the week and the contract’s highest settlement since $12.73 on Nov. 23. January soymeal jumped $9.80 to $358.60 per ton, up 2.6% for the week and the highest close since Nov. 22. January soyoil rose 88 points to 57.22 cents per pound, down 2.9% for the week. Soybeans finished the week strong after the early-week sell-off appeared to spark new export business. USDA today reported a daily sale of 122,000 MT of soybeans for delivery to “unknown destinations” during the 2021-22 marketing year. Today’s announcement follows three previous daily soybean sales this week, totaling 426,000 MT, to China or unknown destinations. The potential for additional export business, along with strengthening chart patterns, could help futures extend gains next week. Also, USDA’s next Supply and Demand report Dec. 9 holds potential for market-moving adjustments to certain parts of the U.S. and global soybean balance sheet. USDA is expected to raise its U.S. soybean ending stocks projection for 2021-22 to 352 million bushels from an estimated 340 million bushels currently, based on a Reuters survey of analysts.

Wheat: March SRW wheat futures fell 11 1/4 cents to $8.03 ¾, down 36 1/2 cents for the week. March HRW futures fell 16 1/2 cents to $8.22, down 43 cents on the week. March spring wheat futures fell 21 1/2 cents to $10.20 3/4, down 27 3/4 cents on the week. Winter wheat futures posted their first weekly decline in four weeks amid profit-taking and ideas a top may be forming. Still, near-term price uptrends on the daily charts remain in place. Traders will pay close attention to USDA’s Dec. 9 Supply and Demand report, but no big changes are expected from last month’s data. Weather conditions in the HRW wheat belt remain dry as the crop enters dormancy. Little precipitation is expected over the next week. Also, the excess rain that damaged the Australian wheat crop’s quality may influence market direction in the coming weeks.

Cotton: March cotton futures rose 50 points to 104.20 cents per pound. The cotton market may tread water in the week ahead or be driven by technical as the industry awaits USDA’s next weekly export sales and Supply and Demand reports Dec. 9. The reports will offer clues to the milling and processing industry’s reaction to the cotton market’s post-Thanksgiving sell-off. Big export sales and/or shipments could power a strong rebound. With the bulk of the U.S. crop harvested cotton market participants will likely concentrate heavily upon the demand situation, and given the modest, and stable, activity of the domestic milling industry, traders will be watching the export situation with great interest. Whether export sales will justify the relatively elevated prices and whether industry export shipments accelerate from the depressed levels seen through much of fall will be the main focus. From a technical standpoint, the cotton rally appears to be over. However, history suggests the market tends to to begin a sizeable seasonal rally at some point in December.

Cattle: February live cattle futures fell 62.5 cents to $138.95, down 1.6% from a week ago and the first weekly decline in the past three. January feeder cattle fell $1.65 to $164.125, the lowest settlement since Nov. 22. Live cattle futures fell under mild profit-taking pressure this week, though the market remains in a two-month uptrend from the Oct. 1 low. Cash cattle will be key to futures direction next week. Prices for slaughter-ready cattle extended a run to 4 1/2-year highs, with some packer bids reaching $142.00 in the Southern Plains late this week. Late today, USDA reported the five-area cash steer price at an average of $140.46, up from $138.13 at the end of last week. Choice cutout values rose $2.34 to an average of $274.36, down from $280.01 at the end of last week, but up from a four-month low early this week. Meatpackers slaughtered an estimated 676,000 head of cattle this week, up 1.0% from the same week in 2020. Cattle slaughter year-to-date was up 2.9% from the same period last year.

Hogs: February lean hog futures fell 50 cents to $81.50, up marginally from $81.025 at the end of last week. Futures showed some short-lived bouts of strength this week, but remained burdened by slumping wholesale pork and weak market psychology. The CME lean hog index rose 59 cents to $70.86, the second consecutive daily gain. While it remains to be seen if the index can establish a near-term low, December futures’ current $3.14 premium to the index implies expectations for a cash market surge of almost $4.00 by the contract’s Dec. 14 expiration. Carcass cutout values fell $6.72 today to a 10-month low of $81.37, led by drops of over $15 in hams and $10 in bellies. Movement totaled 342 loads. Hog slaughter will likely post a seasonal surge the next two weeks. Slaughter this week totaled an estimated 2.667 million head, down 4.3% from the same week in 2020. Slaughter year-to-date was down 2.1% from the same period last year.