After the Bell | July 19, 2021

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Corn: December corn futures closed up 1/4 cent at $5.52 1/4 a bushel after rising overnight to $5.67 1/2, the highest intraday price since $5.97 1/2 on July 2. Grain futures were pressured by a massive sell-off in crude oil that sent Nymex crude down over 7%. Corn’s losses were limited by ongoing concerns over dry conditions in parts of the Midwest, particularly the northwestern corner. Hot and dry weather for much of the Corn Belt in the coming days comes right as much of the corn crop is in its critical pollination stage. A warmer and drier weather pattern is expected the next two weeks across the Midwest, which may further stress crops in the northwest Corn Belt. In USDA’s latest weekly crop progress report, released after the markets closed, 65% of the U.S. corn crop was rated “good” or “excellent” as of yesterday, unchanged from the previous week, though the excellent category rose one percentage point, to 15%. Analysts expected a good-to-excellent reading of 66%.

Soybeans: November soybeans fell 19 cents to $13.72 3/4 a bushel, August soyoil futures fell 162 points to 66.69 cents per pound and August soymeal fell $3.40 to $359.80 per ton. Soybeans were unable to hold overnight gains as a crude oil sell-off spilled into to soyoil and soybeans. Fundamentally, soybean traders must decide whether to trade the extreme heat and building crop stress in the northwestern Midwest or the generally favorable conditions in other areas of the Midwest, Mid-South and Delta. But even in some of the better areas, producers report soybeans aren’t faring the best given saturated soils from recent heavy rains. USDA rated 60% of the U.S. soybean crop good-to-excellent as of yesterday, up from 59% the previous week and consistent with analysts’ expectations.

Wheat: Wheat futures finished mostly 4 1/2 to 7 1/2 cents higher in SRW contracts, mostly 1/4 to 1 1/4 cents higher in HRW contracts and 5 1/2 to 6 1/2 cents higher in the spring wheat market. Wheat futures were pulled off early-day highs by heavy selling in the soybean and soyoil markets. HRS futures surged to their highest level on the continuation chart since November 2012 overnight amid spring wheat crop concerns in the U.S. and Canada. Forecasts call for limited rainfall chances and extreme heat across the Northern Plains and Canadian Prairies for at least the next 10 days. The spring wheat crop continues to deteriorate, as USDA late today reported 11% of the U.S. crop in good-to-excellent condition as of yesterday, down from 16% the previous week. USDA rated 63% of the crop “poor” or “very poor,” up from 55% a week earlier.

Cotton: October cotton futures fell 359 points to 87.11 cents and December cotton lost 322 points to 86.71 cents. The cotton market was hit hard today by bearish outside forces, as crude oil prices plunged over 7% and the U.S. stock market also slumped, helping keep cotton market bulls on the sidelines. If crude oil prices have indeed peaked, that may be bearish for the entire raw commodity sector, including cotton. Weather-wise, the U.S. Delta crop areas need drier and warmer weather to induce better crop development, World Weather Inc. said today. U.S. southeastern states will see a good mix of weather as will Texas crop areas.

Hogs: August lean hog futures fell $1.175 to $104.475 per hundredweight, while October hogs fell $1.375 to $89.375, after earlier rising to $91, a one-month high. Hogs faced profit-taking pressure after last week’s gains and from general commodity market weakness. But strong wholesale pork prices and nearby futures’ large discounts to the CME cash index kept a floor under futures. Wholesale pork price extended a recent climb amid stepped-up retail demand and tight supplies. Primal carcass cutout values at midday averaged $128.98, up $4.04 from the end of last week and the highest in a month. Carcasses on national direct markets ranged from $105 to $114 at midday, USDA reported, compared to $107.32 at the end of last week.

Cattle: August live cattle futures rose 7.5 cents to $120.25 per hundredweight and October live cattle fell 50 cents to $125.10, a five-week closing low. August feeder cattle rose $1.75 to $157.375. Cattle futures were pressured by softer cash markets and poor technical performance last week, while feeder futures gained support from weaker corn price. Wholesale beef extended a six-week decline amid lackluster retail demand. Choice boxed beef cutout values averaged $266.18 per cwt. this morning, down $1.76 from Friday and the lowest price since early April. Live steers in top feedlot regions traded around $123 earlier today, based on negotiated cash sales. Last week, live steers averaged $122.82, according to USDA reports.

 

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