After the Bell | July 9, 2021
Corn: July corn futures settled 8 1/4 cents lower at $6.29 3/4 a bushel, while December futures fell 6 3/4 cents to $5.17, down 11% for the week and the contract’s lowest closing price since $5.15 3/4 on May 25. Corn futures remain under pressure as wetter, milder weather across most of the Midwest provides nearly ideal conditions for the crop’s key pollination phase this month. While more rain will be needed to make a more significant impact on crops, “U.S. Midwest weather is still expected to be plenty wet over the next 10 days with all crop areas getting rain at one time or another,” World Weather said today. USDA, in its monthly Supply and Demand report July 12, is expected to cut its estimate for corn stocks at the end of the 2020-21 marketing year to 1.008 billion bu., based on an average of analysts’ estimates, down from 1.107 billion currently. Projected ending stocks for 2021-22 are expected to be increased to 1.402 billion bu. from 1.357 billion in USDA’s June Supply and Demand report.
Soybeans: November soybean futures closed up 9 3/4 cents at $13.29 1/4 and near the session high, but for the week dropped 69 3/4 cents. The market stabilized after sharp declines earlier in the week, supported by expectations for fresh export demand. Monday morning’s updated weather reports will set the tone for trading early next week. Two more weeks of favorable conditions for crops will occur in much of the Midwest, along with regular rounds of rain, World Weather said today. Additionally, a lack of excessive heat will continue for another week, with some of the driest areas in the west-central and northwestern Corn Belt seeing improvements in yield potentials resulting from mild temperatures and additional rain.
Wheat: December SRW wheat futures fell 3 cents to $6.23 3/4 a bushel, hitting a three-month low and losing 37 3/4 cents on the week. December HRW futures rose 5 3/4 cents to $6.05. September spring wheat futures rose 9 1/4 cents to $8.14 1/4, a gain of 24 1/2 cents on the week. One item of interest next week will be whether spring wheat strength can keep a floor under the slumping winter wheat futures markets. Very poor crop conditions in the Northern Plains should continue to support spring wheat, while pressure from expanding winter wheat harvest activity and a declining corn market will weigh on winter wheat futures. USDA today reported net U.S. wheat sales totaling 290,800 metric tons MT for the week ended July 1, including sales of 69,500 MT to China.
Cotton: December futures climbed 83 points to 87.71 cents a pound, a 74-point rise from a week ago. USDA today reported export sales of 177,000 bales for 2021-22, while shipments for the week totaled 294,800 bales, impressive numbers that powered a strong futures response. The market may also have been reacting to recent Texas rains, since excessive moisture can ruin cotton in open bolls. Still, forthcoming weather is not seen as a real threat to the 2021 US cotton crop. Indeed, these is a risk of having the USDA significantly increase its harvested acreage forecast on Monday’s USDA Supply and Demand report, which could send prices tumbling.
Hogs: The expiring July contract rose 90 cents to $111.00 per hundredweight, while most-active August advanced $1.20 to $101.575. After dropping Tuesday, wholesale pork prices moved steadily higher this week. That strength, as well as the virtual end of the early-summer drop in hog prices (as indicated by the CME Lean Hog Index slipping just 3 cents to $109.74 on the preliminary quote for Thursday), suggests the hog and pork complex will prove comparatively firm through mid-July. Some of the lowest slaughter totals of the year, along with apparently vigorous consumer demand, should support prices.
Cattle: August live cattle settled 5 cents higher at $119.225 per hundredweight, the contract’s lowest closing price since $118.55 on June 11 and a 2.3% decline for the week. August feeder cattle rose $1.85 to $159.175, a gain of 1.3% for the week. Live cattle futures may face additional pressure next week from a protracted slump in wholesale beef prices and increasingly bearish chart patterns. Prices for slaughter-ready cattle appear to be leveling off and possibly turning lower, which would likely weigh on futures. Live steers on national direct markets earlier today averaged $124.67, while prices at five top feedlot areas averaged $123.67. By comparison, live steers averaged $123.89 last week. Choice cutout values early today averaged $281.97, down 3% from last week’s average of $290.63 and the lowest since mid-April.