After the Bell | February 25, 2022
Corn: May corn futures plunged 34 1/2 cents to $6.55 3/4, the lowest closing price since Feb. 18 but still up 3 cents for the week. December futures fell 25 cents to $5.79 3/4. Corn futures followed wheat lower in a broad grain market selloff after Russia’s invasion of Ukraine yesterday sent prices to multi-year highs. The Russia-Ukraine conflict, barring a quick resolution, will command market focus next week, with corn likely to take its directional cue from wheat. Corn futures’ quick reversal lower after briefly rising above $7.00 yesterday suggests the market is near an exhaustion point and may be close to establishing a near-term peak.
Soybeans: May soybeans fell 69 1/2 cents to $15.84 1/2, down 19 1/4 cents for the week and the lowest close since Feb. 15. May soymeal fell $12.90 to $442.70. May soyoil fell 304 points to 68.93 cents. Soybeans took steep losses amid profit-taking following yesterday’s surge to 9 1/2-year highs. The Russia/Ukraine war will continue to be the market’s primary focus but is expected to have limited impact on soybeans, outside of soyoil and other vegetable oil markets. Nearby soybean futures’ sharp pullback after briefly pushing above $17.00 yesterday suggests the market has reached an exhaustion point and further declines early next week may confirm a near-term top was established.
Wheat: May SRW futures plunged 75 cents to $8.59 3/4 but still gained 55 3/4 cents for the week. May HRW futures dropped 75 cents to $8.91 but gained 40 cents for the week. May spring wheat futures fell their daily limit of 60 cents to $9.60 1/4. Wheat market turbulence triggered by Russia’s invasion of Ukraine is likely to continue next week. While there is concern about wheat supplies from the Black and Azov Seas since the two countries combined account for nearly 30% of global wheat exports, money flow and emotion will have much more to do with next week’s price action than fundamentals or rationale. The longer the conflict persists, the greater chance it will disrupt global wheat movement.
Cotton: May cotton futures fell 53 points to 118.63 cents per pound, the lowest closing price since Jan. 25 and a weekly drop of 253 points. Cotton extended weakness stemming from a midweek breakdown in the wake of Russia’s invasion of Ukraine, as equity markets’ sharp initial declines and the U.S. dollar’s upswing raised concern over foreign demand for U.S. commodities. Prices fell despite strong numbers in USDA’s weekly Export Sales report. Weekly sales for 2021-22, at 247,000 bales, were up 56% from the previous week but down 7% from the four-week average. For 2022-23, net sales totaled 218,200 bales.
Cattle: April live cattle fell 37.5 cents to $141.925, the lowest closing price since Jan. 27 and a $3.95 weekly decline. March feeder cattle rose 92.5 cents to $160.025. Concerns over spring demand contributed to selling this week, despite further gains in cash cattle. Live steers for the week through this morning averaged $143.40, up from $142.36 last week. Ongoing weakness in wholesale beef also weighed on futures, with Choice cutout values down 97 cents today to $258.27, near an 11-month low. USDA’s Cattle on Feed report released after today’s close showed an estimated 1.999 million head sent to feedlots during January, down 1.2% from the same month in 2021 and larger than expectations for a decline of about 0.8%. Cattle on feed as of Feb. 1 totaled 12.199 million head, up 0.8% from a year earlier, consistent with trade expectations.
Hogs: April lean hogs dropped $1.85 to $103.675, the lowest closing price since Feb. 14 and down $5.725 for the week. This week’s price action looked like a seasonal late-winter top as futures posted contract highs then fell sharply the past three days. Active followthrough selling early next week would confirm a deeper corrective pullback is underway. But if buyers resurface early next week, this week’s declines would amount to a correction in a bull market. Technicals will likely overshadow fundamentals, but the CME lean hog index is projected to rise 36 cents to $98.40 on Monday (as of Feb. 24), which would be the highest since Sept. 7 and suggests the cash market may have further upside. Wholesale pork also remained strong. Pork cutout values fell 81 cents today to $113.32, still up $3.41 for the week.