After the Bell | February 1, 2022
Corn: March corn futures rose 8 3/4 cents to $6.34 3/4. December futures rose 4 1/4 cents to $5.77 3/4, after posting a contract high at $5.79 3/4. Corn futures rose with spillover from strength in soybeans and wheat, as a shrinking crop outlook in South American continued to encourage speculative buying in grains. Crop Consultant Michael Cordonnier kept his corn production forecasts for Argentina and Brazil unchanged at 51 MMT and 112 MMT, respectively. After today’s close, USDA reported corn processed for ethanol in December at a higher-than-expected 485.8 million bu., up from 466.9 million bu. in November and up from 431.7 million in December 2020.
Soybeans: March soybeans rose 38 cents to $15.28 1/2, the highest close for a nearby contract since June. March soymeal rose $17.10 to $436.00 per ton, the highest settlement for a nearby contract since prices topped $450.00 in mid-May. March soyoil rose 101 points to 65.83 cents. Soybean futures soared to contract highs for the fourth straight session on fresh export business and expectations a smaller South American crop will boost demand for U.S. beans. Pro Farmer consultant Michael Cordonnier lowered his Brazil soybean crop projection 4 MMT, to 130 MMT, his sixth cut since late December. By comparison, USDA estimates Brazil’s crop at 139 MMT. Cordonnier also lowered his forecast for Argentina’s soybean crop by 1 MMT, to 42 MMT, citing the impacts of drought.
Wheat: March SRW wheat rose 7 3/4 cents to $7.69. March HRW wheat rose 5 cents to $7.86 1/4. March spring wheat futures rose 8 1/2 cents to $9.15. Wheat futures posted a corrective bounce following yesterday’s losses on strength in soybeans and weakness in the U.S. dollar. Ongoing worries a possible Russian invasion of Ukraine could disrupt the global wheat trade remains a supportive background factor. On the bearish side, a major winter storm expected to stretch from Colorado to the East Coast may provide much-needed moisture for dry winter wheat acreage in the Central Plains.
Cotton: March cotton futures fell 24 points to 127.33 cents per pound after rising earlier to $129.37 cents, a contract high for the third consecutive day. Deferred contracts ended higher. Nearby cotton futures faded under profit-taking and long liquidation after rising earlier to fresh 10-year highs. Weakness in March future also reflected speculative funds rolling bullish positions ahead to May and other deferred months. U.S. stocks climbed and the U.S. dollar slipped for a second day, providing some underlying support for cotton futures and potentially signaling renewed buying interest tomorrow.
Cattle: April live cattle futures climbed 85 cents to $145.375 after posting a contract high at $145.85. February live cattle rose 72.5 cents to $140.30, the highest close for a nearby contract since March 2016. March feeder futures advanced 67.5 cents to $163.70, the highest close since Jan. 20. USDA’s semi-annual Cattle Inventory report yesterday reflected a tight supply outlook for calves and yearlings available for feedlots and for beef supplies generally. The beef cow herd totaled 30.1 million head as of Jan. 1, down 2.0% from a year earlier and the lowest since 2015. All cattle and calves totaled 91.9 million head, also down 2.0% from a year ago.
Indications that cash prices are firming and packers are returning to normal slaughter rates also supported cattle futures. Cattle slaughter so far this week was an estimated 241,000 head, up 8,000 from the same period last week and up 7,000 from the same period in 2021. Slaughter had averaged about 5.0% under year-ago in January. Cash trade may rise $1.00 to $2.00 from last week, sources reported.
Hogs: April lean hogs rose $1.975 to $97.675 after posting a contract high at $99.15. Deferred contracts also reached contract highs, with June futures touching $108.65. Hog futures extended a rally that began in mid-January on strengthening cash fundamentals and indications slaughter is returning to normal levels after Covid-related worker absences forced meatpackers to slow processing last month. Strong technicals driving speculative buying, along with a broadly bullish commodity market backdrop, also contributed to hog market strength. The latest CME lean hog index rose $1.54 to $82.15, the highest reading since Oct. 25, and is expected to jump another 99 cents tomorrow, illustrating cash market strength. Pork cutout values fell 79 cents early today to an average of $93.72.