After the Bell | July 26, 2021

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Corn: Futures posted gains of 2 1/2 to 4 cents through the July 2022 contract, with December up 3 3/4 cents to $5.46 3/4 a bushel. Corn futures traded lower for much of the day on follow-through selling after a poor close last Friday. Traders chose to focus on the second week of outlook, which overnight models indicated would feature slightly cooler temps and some increased rain chances compared with the hot and dry forecast this week. But when the midday GFS model run removed some of the rains through the heart of the Corn Belt, prices firmed. Prices will continue to ebb and flow with the weather and crop condition ratings, but the demand side of the market isn’t helping bulls. USDA’s latest weekly crop condition report today rated 64% of corn either “good” or “excellent” as of yesterday, down from 65% a week ago and also slightly below expectations pf 65%, based on the average analyst estimate. Weekly corn export inspections totaled 40.8 million bu., up from 33.1 million bu. during the same week last year but shy of the “required” pace to hit USDA’s forecast.

Soybeans: November soybeans rose 6 cents to $13.57 3/4 a bushel, after earlier falling to $13.32, near a two-week low. December soymeal fell $1.10 to $355.10 per ton and December soyoil rose 84 points to 64.07 cents per pound. Soybeans and soymeal recovered from overnight losses with help from gains in soyoil and lingering concerns heat and dryness in the Midwest will hamper crop development as soybean approach critical reproductive stages. Highs will reach the upper 90s Fahrenheit in a few eastern South Dakota locations today, and the interior eastern and southeastern parts of the state will warm to the lower 100s Tuesday, with upper 90s in some nearby areas as well as in parts of eastern Nebraska and western Iowa, World Weather Inc. said in a report today. Soybeans inspected for export during the week ended July 22 totaled 241,897 MT, up from 143,934 MT the previous week and in line with expectations. In USDA’s weekly crop condition report, 58% of soybean acreage was rated “good” or “excellent” as of yesterday, down from 60% a week earlier and below expectations for about 60%.

Wheat: September SRW futures fell 7 cents to $6.77 a bushel, September HRW fell 7 cents to $6.39 and September spring wheat fell 4 3/4 cents to $8.78 3/4. Pressure stemmed from fresh supplies from the U.S. winter harvest and sluggish export demand. Spring wheat extended last week’s decline amid beliefs the market may have put in a top. Wheat inspected for export during the week ended July 22 totaled 477,964 MT, down from an upwardly revised 532,898 the previous week and in line with expectations. USDA today reported the U.S. winter wheat crop was 84% harvested at the start of this week, up from 73% a week earlier and slightly higher than analyst expectations, which averaged 83%. Spring wheat was rated 9% good-to-excellent, down from 11% in those categories a week ago, and 66% poor-to-very poor, up from 63% a week ago.

Cotton: Futures settled 6 points lower to 11 points higher through the May contract, with December settling at 89.60 cents. Cotton was influenced by weaker grain and soybean markets for much of the day. But as corn and soybeans firmed, cotton futures came off their lows. Weakness in the U.S. dollar index to kick off the week also helped produce the high-range finish in cotton, though the dollar is up sharply from the May lows. Forecasts signal conditions will be warmer and drier than they’ve been from West Texas eastward across the South, though that isn’t necessary a bad thing for a cotton crop that has generally received ample rains. USDA rated the U.S. cotton crop 61% good-to-excellent at the start of this week, up from 60% a week ago and up from 49% a year ago.

Hogs: August lean hogs rose 5 cents to $107.40 per hundredweight after earlier reaching a five-week high, while October futures rose 47.5 cents to $93.10. Hog futures extended last week’s gains amid stronger wholesale pork markets, tight pork supplies and stronger technical patterns. Carcasses on national direct markets traded between $100 and $110 early today, compared to a five-day rolling average at $105.55, USDA reports showed. At the end of last week, direct market carcasses traded at $104.59, down 2.5% from a week earlier. At midday, the average carcass cutout value was $127.57, up $5.20 from Friday and the highest since June 14. August lean hog futures remain at a discount to the CME lean hog index, which was at $112.21 for the two days ending July 22.

Cattle: Live cattle futures finished $1.075 to $2.05 higher through the February contract. Feeder cattle posted gains of $1.15 to $2.30 through the January contract. Last Friday’s cattle reports supported cattle futures today, especially the Cattle Inventory Report, which showed the U.S. beef herd contracted more than anticipated. The beef cow inventory dropped 2% versus year-ago, while the steer and heifer inventories signal the available feeder cattle supply outside of feedlots is smaller than last year. Market direction this week will partly depend on cash cattle expectations. Last week’s average cash price of $120.77 was down $2.05 from the previous week. August live cattle finished today $2.68 above last week’s average cash price, so traders will likely want to see signs of cash strength before they push futures much higher.

 

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