After the Bell | December 7, 2021
Corn: Corn recovered from declines earlier today to close modestly higher, with the March contract up 2 1/2 cents at $5.86, the highest closing price since $5.91 3/4 on Nov. 26. Corn futures traded slightly weaker and in narrow ranges much of the day as the market awaited USDA’s monthly Supply and Demand Report on Thursday. The late-session upturn may in part have been spurred by reports the Biden administration will announce $700 million in COVID-related biofuel industry grants today, pairing the announcement with new biofuel mandates, Reuters reported. USDA’s Supply and Demand report Thursday is expected to carry only small changes to U.S. and global supply projections. Ending U.S. corn stocks are expected to be trimmed about 6 million bu. to 1.487 billion bu., based on a Reuters survey of analysts. Ending global corn supplies may be increased to 304.47 MMT from 304.42 MMT. Brazil’s estimated crop may be raised to 118.26 MMT, up 0.2% from the current figure.
Soybeans: January soybeans dropped 11 1/4 cents to $12.50 1/4. January soymeal fell $2.90 to $349.70 per ton, while January soyoil declined 76 points to 57.10 cents per pound. Soyoil futures were higher through midmorning but weakened in the wake of wire service reports on expected proposals for biofuels blending rates for 2020, 2021 and 2022. Soyoil’s late weakness suggested traders were disappointed by the speculated cuts for the first two of those years, as expectations of much stronger soyoil use in biofuels have been a key driver in the market this year. Dryness in southern Brazil and parts of Argentina is getting more attention amid forecasts for hotter, drier conditions and early-planted soybeans entering pod-setting and -filling stages. The building dryness and hotter, drier forecasts prompted Crop Consultant Dr. Michael Cordonnier to lower his bias for the soybean crops in both Brazil and Argentina, though he held his crop production estimates unchanged.
Wheat: March SRW wheat rose 2 1/4 cents to $8.08 1/2 and nearer the session high. March HRW wheat rose 5 cents to $8.27 1/2, also nearer the session high today. Spring wheat futures rose 8 3/4 cents to $10.36 1/2. A tightening global supply outlook continues to support wheat futures, even with USDA’s Supply and Demand Report Thursday expected to show slightly larger U.S. and world stocks. Analysts expect the agency to raise 2021-22 U.S. ending wheat stocks to 589 million bu. from 583 million bu. Global stocks are expected to be up around 0.2% to 276.3 million MT. World Weather Inc. today reported wheat harvest and quality conditions in eastern Australia have improved. Recent rains in southern Argentina have been good for late reproduction and filling. Conditions in the U.S. Plains are still too dry, especially in Montana and Oregon.
Cotton: March cotton futures fell 64 points to 106.37 cents per pound, near the session low. Big gains in U.S. stocks and Nymex crude oil this week are keeping a floor under cotton futures. However, the bulls remain constrained by a still-bearish near-term technical posture and a strong U.S. dollar index that is not far below its recent eight-year high. Cotton futures may continue looking to key outside markets for near-term price direction. World Weather today reported West Texas cotton harvesting will continue to advance well, and late season fieldwork is ending in the Carolinas, Georgia, Alabama and the eastern Delta. Cotton traders await USDA’s weekly export sales report and monthly Supply and Demand report, both Thursday. The Supply and Demand update is expected show slight reductions in global cotton production, consumption and ending stocks.
Cattle: February live cattle futures fell 42.5 cents to $139.225, near the middle of the day’s range. The most-active contract is up $1.325 since the end of November. January feeder cattle fell 22.5 cents to $165.025. Live cattle futures were pressured by slumping wholesale beef prices and ideas the recent strength in the cash market is losing momentum. Cash trade has yet to establish a firm tone so far this week, but prices are expected to hold around steady with last week’s multi-year highs amid limited supplies of market-ready animals. 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. Boxed beef values slipped again today, further illustrating retailers’ struggles to move increasingly pricey cuts. Choice cutout values fell $4.50 today to $268.03, the lowest daily average since late July. Movement totaled 159 loads, USDA reported. Wholesale beef prices are expected to remain under pressure through the end of the year.
Hogs: February lean hog futures plunged $1.675 to $76.55, the contract’s lowest closing price since $74.325 on Oct. 27. December futures rose 2.5 cents to $72.075. Hog futures extended yesterday’s nosedive as poor cash fundamentals and bearish market psychology continued to burden market. The CME lean hog index rose for the third day in the past four, to $70.78, but traders appear to be unconvinced the market has put in a bottom. The preliminary reading for the next index is up 16 cents at $70.94. Wholesale pork rose modestly yesterday and may climb further this week as grocers complete ham purchases for Christmas over the next 10 days. Still, traders apparently anticipate a drop in the ham market once those purchases are completed. The industry’s tradition of pushing weekly hog slaughter to an annual high next week may also be weighing upon prices.
