After the Bell | July 20, 2021

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Corn: Futures posted gains of 12 1/4 to 15 3/4 cents through the July contract, with December ending at $5.65 3/4 a bushel. Corn futures rebounded from Monday’s disappointing finish on support from hot and mostly dry weather forecasts. While sunshine and seasonal temps should aid crops in areas that received recent rains, the hot, dry conditions will increase crop stress in northwestern areas of the region where crops are already suffering from drought. USDA’s crop condition ratings Monday afternoon showed 65% of the crop rated “good” to “excellent,” unchanged from the previous week, though traders expected a one-point increase. And the portion of crop rated “poor” to “very poor” increased a point to 9%. Traders must now weight the good versus the poor areas as they start to formulate yield and production prospects with 56% of the crop silking as of Sunday.

Soybeans: November soybeans closed up 15 3/4 cents at $13.88 1/2 a bushel, December soybean meal rose $5.30 to $369.70 per ton and December soybean oil rose 85 points to 63.93 cents per pound. A rebound in Nymex crude oil futures helped spark gains across the soy complex. Weather patterns in the U.S. Corn Belt still lean bullish. World Weather Inc. said today net drying is expected in the western U.S. Corn Belt during much of the coming 10 days to two weeks. Totally dry weather is not expected, but temperatures will be warm enough to evaporate most of the precipitation shortly after it falls. USDA Monday afternoon rated 60% of the U.S. soybean crop good-to-excellent as of Sunday, up from 59% the previous week and consistent with analysts’ expectations.

Wheat: December SRW wheat closed up 2 1/2 cents at $7.08 3/4 today, after reaching a nine-week high today. December HRW wheat rose 8 1/4 cents to $6.71 1/4. September spring wheat fell 7 3/4 cents to $9.16. Spring wheat crop conditions continue to deteriorate amid extreme drought in the Northern Plains. USDA reported just 11% of the U.S. spring wheat crop in good-to-excellent condition as of Sunday, down from 16% the previous week. USDA rated 63% of the crop “poor” or “very poor,” up from 55% a week earlier. World Weather said high levels of crop stress are expected in much of the Northern Plains through at least the next week. The winter wheat harvest advanced 14 percentage points over the past week to 73% complete, one percentage point below the five-year average and in-line with year-ago, according to USDA.

Cotton: December cotton rose 180 points to 88.51 cents, up 8% over the past two months. Cotton futures bounced back from yesterday’s selloff as both crude oil and U.S. stocks gained ground. Weather concerns in key U.S. crop regions also helped cotton futures sustain a longer-term uptrend that began in April 2020. U.S. Delta crop areas need drier and warmer weather to induce better crop development, World Weather Inc. said in a report today, while the Southeast and Texas are expected to experience “a good mix of weather.” USDA yesterday reported 60% of the U.S. cotton crop in “good” or “excellent” condition as of July 18, up from 56% the previous week. About 69% of the crop was squaring, up from 55% the previous week but below the 73% average for the previous five years.

Hogs: August lean hogs gained 52.5 cents to $105 per hundredweight, while October futures rose $1.65 to $91.025. The hog/pork situation seems stable at this point, with seasonally limited hog and pork supplies meeting vigorous consumer demand amidst the summer doldrums. The complex still appears to be benefiting considerably from elevated beef quotes. Pork cutouts slipped 20 cents to $120.39 at noon today, with a big jump in belly quotes largely offsetting declines in most other cuts. The preliminary figure for the latest CME lean hog index quote edged up 7 cents to $112.33 today, which means August futures ended the session over $7 under the cash quote with less than a month to go before expiration.

Cattle: August live cattle fell 47.5 cents to $119.775 per hundredweight, while August feeders fell $1.85 to $155.525. Wholesale beef values continued an early-summer breakdown today, with choice cutout dropping $1.43 to $265.06, the lowest since early April. The slumping wholesale market raises questions on whether beef demand will return to the impressive levels send during the spring. On cash cattle markets, live steers in top feedlot regions traded near $125 early today, based on negotiated cash sales.

 

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