After the Bell | July 1, 2021
Corn: July corn futures closed down 1/4 cent at $7.19 3/4 a bushel today after hitting a contract high of $7.44 1/2. December corn futures closed up 1/2 cent at $5.89 today and hit a three-week high. Dry regions of the Corn Belt remain a bullish element for the corn market. However, those bullish notions were tempered a bit today, as World Weather Inc. this morning said that “no dominating ridge of high pressure is expected in the U.S. Midwest corn or soybean production areas during the next two weeks,” though no abundant rain is expected. The weather market in corn and soybeans has been restarted, which suggests higher daily price volatility, on the upside and downside, for the near term. Traders are still pondering the near-term impact of Wednesday’s USDA’s surprisingly low planted corn acreage number that has rekindled concerns over tighter supplies.
Soybeans: November soybeans ended 3 1/2 cents lower at $13.95 1/2, after rising to more than a two-week high at $14.23 overnight. July soymeal rose $6.30 to $381.80 per ton and July soyoil fell 12 points to 65.04 cents. Soybean futures came under profit-taking pressure that erased the market’s overnight gains. USDA’s unexpectedly low soybean acreage estimate yesterday remains squarely in trade focus, fueling renewed concern about persistent dryness in parts of the Midwest and tighter supplies next year. The May soybean crush totaled 173.5 million bushels, USDA reported today, in-line with trade averages. The crush is again well down year-over-year.
Wheat: HRW futures paced losses, closing mostly 18 to 20 cents lower. SRW wheat finished 10 to 14 cents lower, while spring wheat futures were mostly 9 to 13 cents lower. Wheat futures built on Wednesday’s strong gains overnight and during early daytime trade. Forecasts call for only light and scattered showers across the U.S. Northern Plains over the next two weeks. A brief cooldown from extreme temps is expected early next week, but the remainder of the two-week period is expected to feature above-normal readings. That will maintain crop stress in the region. As of June 29, USDA noted 93% of U.S. spring wheat areas faced drought conditions. Weekly wheat export sales were uninspiring at 226,300 MT and nearer the bottom of the range of pre-report estimates.
Cotton: Cotton futures finished 98 to 100 points higher in the most actively traded contracts, though that was only midrange for the day. Cotton futures bounced back from yesterday’s sharp selloff amid corrective buying. But the rebound stalled midmorning and prices retreated from their highs, suggesting there wasn’t much fresh buyer interest in the market. Abundant rains are expected to continue in cotton areas of Texas over the next 10 days. World Weather Inc. says rains may be heavy enough in some areas to reduce cotton conditions. As of June 27, 10% of Texas’ cotton crop had bolls open, which makes that portion of crop vulnerable to some condition declines if rains are excessive. Weekly cotton sales of 42,600 running bales for 2020-21 were down 43% from the previous week and 64% from the four-week average.
Hogs: August lean hog futures fell $2.95 to $100.30, after briefly dropping the $3 daily limit. October futures fell $2.40 to $84.875. Hog futures succumbed to late pressure, burdened by sliding pork prices and beliefs the market topped out in June and the second half of the year will bring lower prices. With the market’s technical posture significantly damaged by the steep sell-off in June, buying interest has gained little momentum. Cash markets were a mixed bag. Carcasses on daily direct markets ranged from about $109 to $116 early today, USDA reported. By comparison, carcasses yesterday averaged $113.02, up $2.39 from the previous day but down from $116.89 at the end of last week. Pork cutout values early today averaged $114.94, up $1.10 from yesterday but still down nearly 15% from the early-June peak, USDA data showed.
Cattle: August live cattle closed up 85 cents at $123.575 per hundredweight, a two-week high. August feeder cattle closed up $1.70 at $156.325 after hitting a three-week low early. Futures posted decent gains in the face of rising corn futures prices and lackluster weekly USDA U.S. beef export sales data. Cash cattle prices today saw live steers average $123.93 in five top U.S. cattle markets, down from last week’s average of $125.47. Boxed beef prices continue to slide this week amid slowing retailer demand. However, prices may be nearing levels that attract some value buying, as reflected by better boxed beef movement in recent days. Choice cutout values at noon today fell another $2.98 and Select grade was down $0.88, on movement of 86 loads.
