After the Bell | December 6, 2021
Corn: Corn futures finished narrowly mixed, with the March contract down 1/2 cent to $5.83 1/2. Prices were under pressure most of daytime trade after finishing lower overnight, but closed high-range, signaling little selling conviction. Choppy-to-sideways price action is likely ahead of Thursday’s USDA crop reports. While there won’t be an updated corn crop estimate this month and U.S. ending stocks are expected to be only modestly changed, many traders will be reluctant to add new positions on either side of the market ahead of the data. USDA’s weekly corn export inspections totaled 29.8 million bu., down from 31.7 million bu. the previous week and down from 32.5 million bu. during the comparable week last year, but within trade expectations. Corn inspections for November totaled 143.9 million bu., which was close to the seasonal average. So far in 2021-22, corn inspections are running 16.0% below year-ago, while USDA’s forecast, which could be changed Thursday, calls for a 9.2% decline.
Soybeans: January soybeans fell 5 3/4 cents to $12.61 1/2, after rising overnight to $12.74 3/4, the highest intraday price since $12.81 on Nov. 24. January soybean meal fell $6.00 to $352.60 per ton and January soyoil rose 64 points to 57.86 cents per pound. Soybeans took pressure from soymeal market weakness and from reports of weekend rains in some areas of South America. In Brazil, northeastern Rio Grande do Sul and large parts of Parana and Sao Paulo received beneficial rains the past few days. However, southern Rio Grande do Sul soybean regions missed the significant rainfall amounts and need moisture soon. Early today, USDA reported a daily sale of 130,000 MT of soybeans for delivery to China during the 2021-22 marketing year. The USDA announcement followed four daily soybean sales last week totaling 548,000 MT for delivery to China or “unknown destinations.” Also, USDA reported 2.247 MMT of soybeans inspected for export during the week ended Dec. 2, down from 2.258 MMT the previous week, but still relatively strong.
Wheat: March SRW wheat futures rose 2 1/2 cents to $8.06 1/4, after earlier falling as much as 14 1/4 cents. March HRW futures fell 1 3/4 cents to $8.22 1/2. March spring wheat rose 7 cents to $10.27 3/4. Winter futures recovered from early declines as fresh export business on the global market fueled ongoing concern over shrinking stockpiles. Saudi Arabia’s main state wheat buying agency, the Saudi Grains Organization, purchased an estimated 689,000 MT of wheat in an international tender, Reuters reported. Also, Jordan issued a tender to buy 120,000 MT of milling wheat that can be sourced from optional origins. U.S. wheat exports have been sluggish. USDA reported only 245,963 MT of wheat inspected for export during the week ended Dec. 2, down from an upwardly-revised 390,771 MT the previous week. Wheat inspected for export in the 2021-22 marketing year to date totaled 11.15 MMT, down 17% from the same period in 2020-21.
Cotton: March cotton futures rose 281 points to 107.01 cents per pound, the highest closing price in a week. Cotton futures climbed with assistance from strength in crude oil futures and in U.S. stocks, which indicated easing concerns the Omicron coronavirus variant would cause a global economic slowdown. The S&P 500 index rose 1.2% and the Dow gained nearly 2.0%. USDA, in its Supply and Demand update Dec. 9, is expected make small cuts to its global estimates for 2021-22 production, consumption and ending stocks. Estimated global ending stocks may be reduced to 86.74 million 480-lb. bales, down from the current estimate of 86.93 million. Large speculators reduced bullish bets in the cotton market as prices slumped in late November, data from the Commodity Futures Trading Commission showed. Managed funds cut net long positions in cotton futures and options by 6,050 contracts to 77,743 contracts as of Nov. 30, the lowest since late October but still more than double the net long at the start of June.
Cattle: February live cattle rose 70 cents to $139.65, the contract’s highest settlement since Nov. 26. January feeder cattle rose $1.125 to $165.25. Live cattle futures were supported by ongoing strength in the cash market. Last week’s average live steer price rose $2.27 to $140.44, the ninth consecutive weekly gain and the highest since at least June 2017. The increase was somewhat unexpected, since packers had fresh contract supplies available. Given tight market-ready supplies after feedlots pulled animals forward in recent weeks, we expect this week’s cash trade to be steady-to-firmer, though the market is due for a pause. On the wholesale beef market, Choice cutout values fell $1.83 to $272.53 on movement of 116 loads. Feeder cattle were supported by a combination of strength in live cattle, weakness in corn and good demand for feeders. While initial trade at the Oklahoma City auction was light, demand was reportedly moderate to good.
Hogs: February lean hog futures fell $3.275 to $78.225, the lowest closing price since $79.325 on Nov. 10. December hogs fell $1.95 to $72.05. Bearish overall cash market fundamentals continue to pressure hog futures, though strength in the wholesale pork market may help limit further price downside this week. Pork carcass cutout values rose $2.34 today to an average of $83.71, up from a 10-month low Friday. Movement was relatively strong at almost 400 loads. However, other components of the cash market continued to sag. National direct carcass hog values fell $1.29 to $60.51. Tomorrow’s CME lean hog index is projected to rise 25 cents to $70.78, still near a 10-month low hit Nov. 29. December futures’ ongoing premium to the cash index still suggests the cash hog market has put in near-term bottom. But until the cash index turns consistently higher, buying in futures likely will remain limited, especially given February’s large premium to the cash index.
