After the Bell | December 8, 2021
Corn: March corn futures rose 1 1/4 cents to $5.87 1/4, the highest closing price since $5.91 3/4 on Nov. 26. Corn market bulls were disappointed with today’s slight price gains after USDA reported a daily sale of 1.844 million MT of U.S. corn to Mexico. The sale was the fifth-largest daily corn sales figure to any country and the largest daily corn sale ever to Mexico. Still, March corn futures remain in a near-term price uptrend, supported by signs of improving exports and strong demand from domestic ethanol producers. U.S. ethanol production increased 55,000 barrels per day (bpd) to 1.090 million bpd for the week ended Dec. 3. That’s the highest level since the near-record production of 1.107 million bpd the week ended Oct. 29. USDA’s monthly Supply and Demand report tomorrow is expected to show minor adjustments to U.S. and global supply projections. U.S. corn ending stocks may be lowered about 6 million bu., to 1.487 billion bu., according to a Reuters survey of analysts. USDA’s weekly export sales report is expected to show net U.S. corn sales of 600,000 to 1.4 MMT for the week ended Dec. 2.
Soybeans: January soybean futures rose 10 3/4 cents to $12.61, recovering from earlier weakness to end near session highs. January soymeal jumped $7.50 to $357.20 per ton. January soyoil fell 155 points to 55.55 cents per pound, the lowest closing price since 55.18 cents on Dec. 1. Soybeans bounced back from overnight declines after USDA reported another Chinese purchase and soymeal asserted upside leadership in the soy complex. Early today, USDA announced a daily sale of 130,000 MT of soybeans for delivery to China during the 2021-22 marketing year. Today’s announcement follows six daily soybean sales since Nov. 30 totaling 801,000 MT for delivery to China or unknown destinations in 2021-22. USDA’s Supply and Demand report tomorrow is expected to show slight increases in U.S. and global soybean stockpiles next year and slight decreases in South American crops.
Wheat: March SRW wheat fell 14 cents to $7.94 1/2 and nearer the session low. March HRW wheat fell 15 1/2 cents to $8.12, also nearer the session low. March spring wheat fell 1 1/4 cents to $10.35 1/4. The wheat futures markets succumbed to more profit-taking pressure amid a lack of fresh, bullish fundamental news. Traders await tomorrow’s USDA monthly Supply and Demand report, which is expected to show a slightly larger forecast for U.S. and global wheat stocks. USDA is expected to raise its estimate for 2021-22 U.S. ending wheat stocks to 589 million bu. from 583 million bu. Global ending stocks are expected to be up around 0.2% to 276.3 million MT. Traders will also examine tomorrow’s weekly USDA export sales report, which is expected to show U.S. wheat sales of 50,000 to 400,000 MT.
Cotton: March cotton futures rose 35 points to 106.72 cents per pound, ending near the session high. Cotton futures extended the past week’s gains with support from firmness in U.S. stocks and crude oil, as well as a weaker tone in the U.S. dollar index. Trading was relatively subdued ahead of USDA’s monthly Supply and Demand and weekly export sales reports tomorrow. USDA is expected make small cuts to its estimates for global production, consumption and ending stocks for 2021-22. Estimated global ending stocks may be reduced to 86.74 million 480-lb. bales, down from the current estimate of 86.93 million. Global production may be lowered to 121.65 million 480-lb. bales from 121.79 million, based on a Bloomberg survey of analysts. Traders will also scrutinize USDA’s weekly export numbers for an update on demand from China and other top foreign markets.
Cattle: February live cattle futures fell 55 cents to $138.675, while December futures fell 67.5 cents to $137.55. January feeder cattle fell $1.625 to $163.40. Weakness in wholesale beef prices and indications the cash market’s upward momentum is waning weighed on cattle futures. Live steers are expected to hold steady with last week’s levels around $140, but packers may temper their aggressive bidding seen the past month. Still, nearby December and February contracts have moved to significant discounts to cash, seemingly reflecting concerns over consumer demand for beef, since cattle slaughter typically declines from late fall-early winter levels to annual lows in the February-March period. Export demand remains robust and might even improve in the coming weeks as China build supplies for Chinese New Year celebrations around Feb. 1. Choice cutout values remained under pressure, falling $3.92 today to $264.11, the lowest daily average since April 6.
Hogs: February lean hog futures slipped 50 cents to $76.05, the lowest closing price since $74.325 on Oct. 27. Hog futures extended this week’s sharp slide amid weak cash fundamentals and concern over pork demand in 2022. But downward momentum seemed to dissipate today, possibly reflecting expectations for seasonal and cyclical reductions in hog and pork supplies over the next few months. Hog supplies typically peak in mid-December, then begin a seasonal decline into early summer. That drop seems likely to be greatly exaggerated this year if the USDA is correct in indicating winter-spring hog numbers could average about 6.0% under year-ago levels. Tomorrow’s CME lean hog index is expected to decline 11 cents, to $70.83. But the index posted gains in four of the past five days, suggesting the market may be near a bottom. Pork cutout values surged $9.35 today to $90.44, as a gain of nearly $30 in hams fueled a rebound from 10-month lows. Movement was strong at nearly 413 loads.
