After the Bell | July 12, 2021
Corn: December corn futures closed up 16 cents at $5.33 today and near the session high. July corn gained 39 1/2 cents at $6.69 1/4. Solid gains in the wheat futures market after a bullish USDA supply and demand report this morning helped to pull the corn market higher. USDA lowered its old-crop U.S. corn ending stocks estimate by 25 million bu. from last month, which was slightly below trader expectations. The only change to the balance sheet was a 25-million-bu. increase to feed and residual use. USDA raised its 2020-21 on-farm average cash corn price estimate by 5 cents from last month to $4.40. For 2021-22, USDA raised projected ending stocks by 75 million bu. from last month. It increased planted and harvested corn acreage based on the June 30 Acreage Report.
Soybeans: July soybean futures, which go off the board on Wednesday, finished 28 1/2 cents higher. The August through March contracts ended 19 1/4 to 25 cents higher. Soymeal futures gained $2.40 to $3.60 through the December contract. Soyoil was up 142 to 258 points through the December contract. Soybean futures extended gains following USDA’s reports even though there wasn’t much bullish news in the data. USDA left U.S. old- and new-crop ending stocks unchanged, while it raised global carryover for both marketing years.
Wheat: HRS futures led today’s price rally, finishing 31 1/4 to 46 1/2 cents higher through the March contract with the expiring July contract pacing gains. Winter wheat futures closed mostly 20 to 25 cents higher. HRS wheat futures reacted sharply to USDA’s much lower-than-expected spring wheat crop estimate. Other spring wheat production came in 114.4 million bu. below the average pre-report trade estimate and is 241 million bu. below the 2020 other spring wheat crop. USDA puts harvested wheat acres at 11.215 million, down 845,000 from last year and the national average other spring wheat yield at 30.7 bu. per acre, well below last year’s 48.6 bu. per acre. Durum wheat production is 18.8 million bu. below the average pre-report trade estimate and is down 31.6 million bu. from last year. That pulled the all-wheat crop estimate of 1.746 billion bu. 101 million bu. lower than expected, despite a bigger-than-anticipated increase to the winter wheat crop estimate.
Cotton: December cotton closed up 45 points at 88.16 cents today and nearer the session high. The cotton market got a lift today from solid gains in the grain futures markets. USDA in its monthly supply and demand report made no changes to the supply or demand side of its old-crop cotton balance sheet. It lowered the national average on-farm cash price forecast by a half-cent to 66.5 cents. For 2021-22, USDA raised projected ending stocks by 400,000 bales from last month. It increased total supplies by 800,000 bales on a rise in harvested acres that more than offset a 33-lb. cut to the projected yield, which was the largest ever from June to July. On the demand side, it raised projected exports 400,000 bales. USDA left its new-crop national average on-farm cash price forecast at 75 cents. USDA reduced abandonment by 1.19 million acres from the June — a record month-to-month reduction.
Hogs: Lean hog futures finished $1.475 higher in the July contract, which expires on Thursday. The August through February contracts gained $1.90 to $2.50. July lean hog futures were supported by firming cash hog prices. The average national direct cash price rose 24 cents this morning after being up $2.04 last Friday. But packers are still working with negative margins, so additional cash strength may be limited. July hogs are now nearly $3 above the cash index, so buying in the soon-to-expire contract will also likely be limited.
Cattle: August live cattle closed up 60 cents at $119.825 today. August feeder cattle closed down $1.025 at $158.15 today. Prices closed near midranges today. Cattle traders were tentative ahead of USDA’s monthly supply and demand report. Higher corn prices in the wake of the report helped to pressure feeder cattle futures today. Live cattle futures saw some corrective upside price action today after recent selling pressure. While August live cattle are trading below the cash market, the upside in futures is likely limited with wholesale beef prices falling.
