After the Bell | January 7, 2022

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Corn: March corn futures rebounded from overnight losses to settle 3 cents higher at $6.06 3/4, up 13 1/2 cents for the week. Corn rose along with soybeans as drought curbs crop prospects in southern Brazil and northern Argentina. USDA’s announcement of a 176,784 MT sale of corn to Mexico also added support. The market likely will consolidate early next week ahead of USDA’s Jan. 12 Crop Production, quarterly Grain Stocks and Supply and Demand reports. USDA is expected to slightly raise its U.S. corn crop estimate by about 7 million bu. to 15.069 billion bu., based on a Reuters survey.

Soybeans: March soybeans jumped 23 cents to $14.10 1/4, up 71 cents for the week and the contract’s highest closing price since June 11. March soymeal surged $14 to $425.00, up $25.90 for the week. March soyoil dropped 12 points to 58.78 cents, still up 225 points for the week. Major reductions to Brazilian soybean crop estimates boosted futures this week, but much of those expected losses are likely factored into the market. Argentina may move to the forefront for traders’ attention as hot and dry conditions are expected to increase crop stress in the country over the next couple weeks.

Wheat: March SRW futures rose 12 1/2 cents to $7.58 1/2 after falling near a three-month low at $7.35 1/2 earlier. The contract was still down 12 1/4 cents for the week. March HRW futures rose 6 1/2 cents to $7.75, down 26 1/2 cents for the week. March spring wheat slipped 1/2 cent to $9.23 1/4, the lowest close since Oct. 5, and was down 58 3/4 cents for the week. Wheat futures recovered from early losses as soybeans lifted other grain markets, which likely prompted funds to cover some shorts ahead of the weekend. USDA’s Winter Wheat Seedings Report Jan. 12 is expected to show all U.S. winter wheat plantings at 34.3 million acres, up from 33.6 million in 2021, based on a Bloomberg survey.

Cotton: March cotton futures rose 40 points to 115.12 cents per pound, up 252 points, or 2.2%, for the week and the fifth consecutive weekly gain. Today’s rebound from yesterday’s declines illustrated the cotton market’s underlying strength even in the face of disappointing weekly USDA export sales. Focus next week will to a large extent shift to USDA’s Crop Production and Supply and Demand reports Jan. 12. USDA is expected to slightly lower its estimate for the 2021-22 U.S. cotton crop to 18.24 million bales, down from 18.28 million in a December forecast, based on a Bloomberg survey. U.S. exports may be reduced to 15.39 million bales from 15.5 million.

Cattle: February live cattle fell 2.5 cents to $137.325, down $2.375 for the week. March feeder cattle declined 60 cents to $166.675, down $3.275 for the week. Softer cash prices and a slowdown in slaughter burdened live cattle futures this week, offset to some degree by strength in wholesale beef. Live steers averaged $138.58 this week, down from last week’s average of $139.59. The cash market likely must show strength next week to halt downward momentum in futures. Choice cutout values rose another $3.26 today to $271.82, up $6.56 from the end of last week and the highest daily average since Dec. 6. Movement totaled 96 loads.

Hogs: February lean hog futures fell $3.30 to $79.65, down $1.825 on the week. Hog futures took pressure from weakness in wholesale pork and beliefs the nearby contract is too rich relative to cash benchmarks. Pork cutout values fell $3.66 today to an average of $85.90, down $5.45 from the end of last week. Movement totaled 392 loads. The preliminary quote for the next CME lean hog index rose 16 cents to $73.73, near a seven-week high posted earlier this week. Signs of tightening hog supplies may support futures early next week, as slaughter rates continue to lag year-ago levels.

 

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