After the Bell | January 4, 2021

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Corn: March corn futures surged 20 1/4 cents to $6.09 1/2, the contract’s highest closing price since $6.14 3/4 on Dec. 27. Futures rallied as South American weather problems prompted reduced production forecasts. Crop Consultant Dr. Michael Cordonnier cut his Brazilian corn crop estimate 1 MMT to 113 MMT. He left his projected corn crop estimates for Argentina and Paraguay unchanged. Given an outlook for little improvement in drought afflicting southern Brazil, northern Argentina, Paraguay and Uruguay, projections may continue dropping, but Brazilian corn production depends more heavily upon the safrinha crop to be planted after soybeans in many areas.

Soybeans: March soybeans soared 34 1/4 cents to $13.89 3/4, the contract’s highest closing price since $14.15 on June 11. March soymeal rose $3.40 to $414.70 per ton, after posting a contract high at $415.90. March soyoil rose 191 points to 58.33 cents per pound, the highest close since Nov. 26. Soybean futures rose for a third straight day as persistent dryness and other adverse weather led to cutbacks to South America’s crop outlook. Cordonnier reduced his Brazilian soybean crop estimate by 2 MMT, to 138 MMT. He also lowered his Argentina soybean crop estimate by 3 MMT, to 45 MMT.

Wheat: March SRW wheat rose 2 3/4 cents to $7.70, while March HRW wheat rose 12 1/2 cents to $8.04, near the session high. March spring wheat futures rose 2 3/4 cents to $9.70 1/2. Wheat futures posted a short-covering bounce following the recent drop to three-week lows, with additional support from reports of struggling crops in the U.S. Plains. Individual state crop condition ratings released yesterday showed major deterioration of the HRW wheat crop last month. “Good” to “excellent” ratings for HRW wheat plunged 29 points in Kansas, 28 points in Oklahoma, 13 points in Colorado and 25 points in Nebraska during December.

Cotton: March cotton rallied 316 points to 116.39 cents per pound, the highest closing price since Nov. 19. December futures set a new contract high. Cotton futures took direction from strength in grain futures, crude oil and U.S. stocks, with the S&P 500 index posting a record high. which that remain at or near record highs. Sharply rising U.S. Treasury yields to start 2022 have the market on notice that inflationary pressures are rising and may continue to do so, a bullish scenario for raw commodities like cotton.

Cattle: February live cattle fell $1.10 to $137.825, the contract’s lowest closing price since $137.375 on Dec. 22. March feeder cattle dropped $3.175 to $166.35, the lowest close since Dec. 28. Feeder cattle led losses in cattle futures as the corn market rallied back near the 6 1/2-month highs reached last week. Live cattle, lacking direction from a yet-to-establish cash market, extended the technically-driven declines of the past week, ending near two-week lows. While recent strength in wholesale beef prices suggests retailer demand is improving, the lack of substantial cash trade yet this week may be discouraging buying interest in futures. Choice cutout values rose 79 cents today to a four-week high at $266.82, while Select rose 33 cents to 259.23. Movement totaled 160 loads.

Hogs: February lean hogs fell 97.5 cents to $80.15, the lowest closing price since Dec. 20. Expectations for large slaughter this week appeared to pressure February futures, as meatpackers typically ramp up operations after the year-end holidays. Traders may suspect a supply backlog will undercut the market, or at least slow an anticipated price advance through early winter. Recent weakness in wholesale pork also weighed on futures, with pork cutout values falling 55 cents today to an average of $85.47. Movement was strong at nearly 435 loads. The latest CME lean hog index rose 10 cents to $71.85. The index has mostly held a range of $71.00 to $73.00 for the past month, but February futures’ unusually large premium to index is likely muting buying interest in futures.

 

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