After the Bell | June 1, 2021

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Corn: July corn advanced 32 cents to $6.88 3/4 and December jumped 31 1/2 cents to $5.77. Funds were active buyers today as the continued El Niño-like atmospheric conditions will push consistent warmth into the northern Plains, southern Canadian prairies, Midwest, Great Lakes, while still cooler south. Overall, this persisting pattern is due to a less wavy pattern across the globe and a Pacific jet stream oriented north, pushing in more warmth in the central U.S. However, a more frequent ridge of High pressure is starting to be modeled across East Asia that could sustain dryness into month’s end. Meteorological summer officially starts today, and grain traders are taking note of a seasonal ridge of high pressure forming across the Central U.S. and retrograding slowly westward into mid-June. Scattered rain forecast next week could be very important, especially in western areas of the Midwest.  Corn inspected for export jumped to 2.049 MMT in the week ended May 27, up from 1.746 MMT a week earlier with China taking more than half of the weekly tally.  China has pushed up its corn export pace to about 1 MMT a week, and that should continue and support stronger cash basis bids.  

Soybeans: Soybean futures ended sharply higher, with July contracts up 17 3/4 cents at $15.48 1/2 a bushel and November up 24 1/4 cents at $13.97. July soymeal rose $2.80 at $398.70 per ton and July soyoil up 154 points at 67.39 cents. Concerns that heat and dryness in the Midwest may stress young crops helped trigger a rally across the grain and oilseed complex. Most of the eastern Corn Belt and about 70% of the western Corn Belt received rain over the holiday weekend, but totals were generally light, especially in the driest areas in the northwest. A warmer and drier weather pattern is expected to settle into the Midwest during the early part of June. Scattered rain coverage and amounts next week will be important. Earlier today, the USDA reported weekly export inspections as of May 27 of 192,221 MT for soybeans, down from 222,107 MT a week earlier. While inspections were on the low end of trader expectations for 90,000 MT to 400,000 MT, the report further underscored robust foreign demand for U.S. ag products.   

Wheat: July SRW wheat closed up 30 cents today at $6.93 1/2. July HRW wheat closed up 24 1/4 cents today at $6.37 1/2. Prices closed nearer the session highs today. September spring wheat futures jumped 42 cents to $7.75 1/2. A weather market has quickly developed in the grains to start the month of June. There is trader concern over this week’s hot and dry weather forecasts for the northern U.S. Plains and southern Canada Prairies, which had spring wheat leading the charge today, despite some rain potential for next week. A little less rain expected for hard red winter wheat production areas later this week will be good for that crop, but quality concerns remain after recent heavy rains. U.S. wheat inspected for export last week fell to 256,496 MT, down from 598,941 a week earlier. Traders expected inspection of 250,000 to 650,000 MT last week.

Cotton: July cotton closed up 213 points at 84.25 cents today and December gained 149 points at 84.81 cents. Prices closed near the session highs today and hit two-week highs. The cotton market bulls had a strong supporting cast of outside markets today. Solid gains in the grains, U.S. stocks indexes that are close to record highs, a weaker U.S. dollar index, and Nymex crude oil prices that pushed to a 2.5-year high today all helped to rally cotton futures. Cotton traders are now looking ahead to U.S. jobs data on Friday for reassurance the biggest global economy is improving following the previous month’s big hiring miss. Reports of major flooding and hail damage in parts of Texas cotton country also supported buying interest in the cotton market today.

Hogs: Lean hog futures ended higher, with July contracts up 30 cents at $119.650 per hundredweight and October up 42.5 cents at $94.50. June futures settled at $118.625, a seven-year high for a nearby hog contract. Much of trade was focused reports JBS SA, one of the top U.S. beef and pork processors, had production in North America and Australia disrupted by a ransomware attack. The disruption likely contributed to a drop in today’s cattle and hog slaughter numbers. Meatpackers slaughtered an estimated 390,000 head of hogs today, down from 485,000 a week ago, the USDA reported. Several USDA cash market reports were delayed in the response to the ransomware attack. Strong pork markets and strong technical patterns continue to support futures, overshadowing a softer tone on the cash hog markets at the end of last week.   

Cattle: Cattle end lower but above the early session lows. August Live cattle were down $2.00 at $116.60 and August feeder cattle fell $2.20 to $149.15.  A major cyber-attack on the global meat producer JBS brought the company’s slaughter and fabrication operations to a halt. This sent shock waves throughout the beef and pork markets. While everyone is hopeful for a quick resolution and plants will be running again as early as tomorrow there is no word from the company. Prices plummeted near the new $5 limit in live cattle and $6.25 limit in feeders before paring early losses into the close. Friday’s CFTC Commitment of Traders data showed very little fund activity in week ended May 25. But funds were still net long some 58,000 contracts and likely exited more this morning.  USDA did not report any midday meat price data today because of the outage. It did estimate today’s slaughter at 94,000 head, down from 121,000 head a week ago.   

 

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