After the Bell | January 14, 2022

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Corn: March corn futures rose 8 3/4 cents to $5.96 1/4, down 10 1/2 cents for the week. Corn futures bounced back from earlier weakness to end near today’s high, boosted by corrective buying and bargain-hunting following yesterday declines. Futures direction next week will partly hinge on South America weather and on soybeans. The corn market’s technical posture eroded over the past two weeks and a March futures push under the January low at $5.84 3/4 could trigger fund liquidation and possible test of mid-December lows around $5.82.

Soybeans: March soybean futures fell 7 1/2 cents to 13.69 3/4, down 40 1/2 cents on the week and the contract’s lowest settlement since $13.55 1/2 on Jan. 3. March soymeal fell $3.30 to $405.60 per ton, down $19.40 on the week, and March soyoil fell 20 points to 58.46 cents per pound. Soybeans were pressured today by improved rainfall prospects next week in southern Brazil, where conditions have been particularly dry. Weekend weather in South America and the extent of expected rain next week will be one key to market direction. Showers and thunderstorms will increase in far southern Brazil Jan. 16-18 and southern, central, and eastern Rio Grande do Sul will receive 0.75 to 1.75 inch of rain, with as much as 1.50 to 2.50 inches in a few localities, World Weather said today.

Wheat: March SRW futures fell 5 1/4 cents to $7.41 1/2, down 17 cents on the week and the lowest close since Oct. 14. March HRW futures tumbled 14 3/4 cents to $7.45, also the lowest closing price since Oct. 14. March spring wheat sank 17 1/4 cents to $8.78 1/4, down 45 cents on the week. Wheat futures extended declines in the wake of USDA’s higher than expected winter wheat seedings estimates, while poor export demand continued to weigh on prices.

Cotton: March cotton futures rose 286 points to 119.70 cents after reaching a contract high at 119.90 cents. The lead contract soared 458 points this week. Cotton extended this week’s rally after USDA lowered its estimate for the 2021 U.S. cotton crop by a larger-than-expected 660,000 bales and reduced projected U.S. ending stocks by 500,000 bales. Lower U.S. production and rising demand paint a bullish scenario likely going to remain in place for the next few weeks. 

Cattle: February live cattle futures rose 97.5 cents to 137.975, up 65 cents for the week. March feeder cattle fell 35 cents to $166.375. Live cattle ended a choppy, sideways week on a firm note, supported by prolonged strength in the wholesale beef market that suggests retail demand is improving. Choice cutout values rose $1.45 today to $284.31, up $12.49 for the week and the highest daily average since Nov. 11. Movement totaled 86 loads. Wholesale strength help mitigate weakness in the cash market and concern Covid absences were forcing some packers to slow processing.

Live steers as of mid-morning averaged $136.58, down from a $138.41 average last week and the fifth weekly decline in the past six weeks. Cattle slaughter picked up slightly this week, by 1,000 to an estimated total of 621,000 head, but that's still down from 652,000 head the same week in 2021.

Hogs: February hog futures rallied $3.05 to $80.90, the highest closing price since Jan. 6 and a gain of $1.05 for the week. Hog futures rallied behind a strong week in wholesale pork. Pork cutout values fell $6.21 today to $89.07, led by a drop of over $18 in hams, but the average is still up from $85.90 at the end of last week. Movement totaled 358 loads. The next CME lean hog index is expected to fall 28 cents to $74.32, the third decline in a row.

Hog slaughter this week was an estimated 2.407 million head, down 6.3% from last week and down 9.6% from the comparable week a year ago. This marked the second straight week slaughter totals fell well short of normal expectations, suggesting packers are slowing operations due to Covid-related worker absenteeism. By contrast, recent USDA estimates implied a 6.0% annual reduction in hog supplies.


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