After the Bell | July 29, 2021
Corn: Futures gained over 1% from September through July 2022 contracts, with December up 7 1/2 cents to $5.56 1/2 a bushel. Corn futures climbed for a third day this week on support from rallying wheat prices and expectations extreme dryness in the northwest Corn Belt will crimp yield potential. Most of the Midwest has ample soil moisture and will experience cooler temperatures starting tomorrow, but drought conditions worsened in the Northern Plains and Upper Midwest, according to the latest U.S. Drought Monitor. Another round of “blistering heat” across the northern Plains further stressed rangeland, pastures, and a variety of summer crops, today’s Drought Monitor update said. Today’s USDA weekly export sales report showed net corn sales reductions of 115,200 metric tons (MT) for 2020-21, a marketing-year low. For 2021-22, net sales of 529,300 MT were up 36% from the previous week and up 21% from the prior four-week average.
Soybeans: Futures rose 15 cents or more in all but the front-month, with the November contract up 16 3/4 cents to $13.77 3/4 a bushel. December soybean meal rose $1.30 to $359.40 per ton, while December soyoil rose 131 points to 64.71 cents a pound. Soybeans rose for a fourth straight day as drought conditions in the Dakotas, Minnesota and northern Iowa stirs concerns over yield losses as the crop nears critical development phases in August. Most of the rest of the Midwest has adequate moisture and will experience cooler temperatures starting tomorrow. However, soybeans “will likely have the most yield potential to lose if rain falters later in August,” USDA today reported a net weekly soybean sales reduction of 79,300 metric MT for 2020-21, on the low end of expectations. For 2021-22, net sales of 312,800 MT were near the midpoint of expectations.
Wheat: Winter wheat futures gained 14 to 16 cents, while spring wheat ended 10 1/2 to 14 3/4 cents higher through the March contract. The Wheat Quality Council HRS tour through North Dakota and neighboring states has confirmed major crop losses due to drought and grasshopper infestation. While the major crop losses are not a surprise, buyer interest has been reinvigorated this week. The yield on samples taken by tour scouts this week averaged 29.1 bu. per acre, well below the 2015-19 average of 43.6 bu. per acre. That is the tour’s lowest yield on record back to 1993. USDA today reported net weekly wheat sales of 515,200 MT, up 9% from the previous week and 46% above the four-week average. Sales included 128,900 MT of HRW sold to China. Wheat export sales got off to a sluggish start in the new marketing year but have been steadily rising.
Cotton: December futures slid 21 points to 90.31 cents a pound. USDA’s weekly export sales report today indicated a net sales reduction of 1,200 running bales for the 2020-21 crop year for the week ended July 22, but 2021-22 sales totaled 192,200 bales. Exports for the week reached 238,300 bales, which fell moderately below the week-prior and four-week average figures. Given the cotton distribution industry’s history of a summer slowdown, these latest numbers show significant demand strength. Export numbers weren’t strong enough to spur a test of Wednesday’s contract highs. The fact that cotton prices have continued working higher despite expectations for a large crop this fall indicates strength in the underlying the market.
Hogs: October lean hogs fell 55 cents to $88.975 per hundredweight, after reaching a two-week low. While October futures extended a decline following yesterday’s limit-down close, cash market fundamentals still appear to favor market bulls. USDA’s midday pork report showed carcass cutout values up $2.96 at $126.18, led by big gains in bellies. Movement was 115.66 loads. USDA today reported net weekly U.S. pork sales of 38,500 MT, up 57% from the previous week and up 43% from the prior four-week average. China bought 807 MT of U.S. pork and took shipment of 5,700 MT during the week ended July 22.
Cattle: October live cattle fell 37.5 cents to $128.15 per hundredweight, while October feeder cattle closed fell $1.375 to $164.20. Higher corn prices weighed on cattle futures, though cash cattle fundamentals appear overall price-friendly. Some light cash cattle sales occurred Wednesday from $121 to $123 in Kansas, Iowa and Nebraska. Texas saw some light sales from $118 to $119. Last week, sales ranged from $119 on the Southern Plains to $124 in the western Corn Belt. USDA’s midday beef report today showed Choice cutout values averaged $275.22, up $2.06 from Wednesday. USDA reported net weekly U.S. beef sales of 22,500 MT, down 11% from the previous week but up 28% from the prior four-week average.
