After the Bell | June 14, 2021
Corn: July corn futures closed down 25 1/4 cents at $6.59 1/4 a bushel, a two-week low, and December corn lost 28 1/2 cents to $5.81 1/4. Trading remains choppy and volatile as the weather market plays out. About 15% to 20% of the Corn Belt received enough rain over the weekend to improve soil moisture conditions, according to World Weather Inc., and forecast models are signaling cooler and wetter conditions from this weekend through all of next week. Updated Corn Belt weather forecasts each day will continue to take the spotlight in the grains. This afternoon’s USDA crop progress report showed corn acreage at 68% “good” or “excellent” condition at the start of this week, down from last week’s 72% and slightly worse than trade expectations for a 69% rating.
Soybeans: Soybean futures fell 36 1/4 cents to 43 1/2 cents, with the November contract leading losses. July soybean meal fell $9.40 to $373.90 per ton and July soybean oil fell 102 points to 65.96 cents. Soy complex futures extended an overnight selloff after spotty weekend rainfall and a cooler, wetter outlook for the U.S. Midwest eased concern over recent extreme heat. Late this week through next week, World Weather reports “Sufficient rain will fall in the central and eastern Midwest to maintain a very good outlook for corn and soybean development.” But the driest areas are northern and western areas of the Corn Belt, and World Weather reports its computer forecast model calls for cooler but drier conditions in the northern Plains and Upper Midwest. The USDA’s Crop Progress report today showed 62% of the soybean crop rated “good” or “excellent” at the start of this week, down from 67% a week earlier and lower than trade expectations for a 65% good-to-excellent rating.
Wheat: Spring wheat futures led losses in the wheat complex today, dropping 17 1/4 cents to 18 3/4 cents, with the September contract down 17 1/4 cents to $7.54 a bushel. HRW futures finished 9-plus to 10 cents lower. SRW wheat closed around 6 to 7 cents lower on the day. Much of the Northern Plains received some beneficial rains last week, but the rains only provided temporary relief and didn’t change the overall dry trend. The forecast signals limited rainfall chances for the Northern Plains this week and only scattered rains next week. Spillover from heavy selling in the corn and soybean markets had as much if not more to do with today’s declines than weather. With winter wheat harvest activity picking up, markets could face seasonal selling from farmer sales and commercial hedging.
Cotton: Futures finished 205 points lower in the July contract and down 179 points to 84.95 cents in December futures, which was midrange for the day. Much of the pressure on cotton came from the sharp selloff in the grain and soy markets and broader commodity price weakness. Weather for West Texas is expected to be hot and dry over the next week, which would likely have been price-supportive if not for the heavy spillover influence. Areas of the Southeast will likely receive rains after a tropical disturbance is expected to move up through the Gulf of Mexico.
Hogs: July lean hog futures ended $1.75 lower at $118.225, while October hogs settled $1.80 lower at $94.80. Hog futures’ six-month rally is showing signs of fatigue amid a softer tone in cash markets, expectations for larger pork supplies and weaker technical patterns. Still, the market remains in a longer-term uptrend amid robust export demand and historically high pork prices that may limit price downside to corrective selling. Cash markets will set the tone in coming days as traders watch to see if last week’s strength can continue. On cash markets, carcasses ranged from $107.66 to $137.00 this morning, according to a USDA report. By comparison, the national direct cash average carcass base price ended last week at $119.26 per hundredweight, up 9% from $109.40 a week earlier, according to USDA reports.
Cattle: August live cattle closed up $1.25 at $121.275 per hundredweight, hitting a four-week high. August feeder cattle closed up $3.425 at $154.60 after notching a two-week high. Feeder futures led the charge today on cheaper feed expectations, as the corn futures market has sold off sharply the past two trading sessions. The big rally in feeders today pulled live cattle futures along for the ride. The average cash cattle price last week was $120.03, up 11 cents from last week. Many look for near-steady cash cattle trade to be seen this week compared to last week. The noon beef report showed Choice grade cutout down $1.53 and Select down $0.54, on light movement of 39 loads. Choice boxed beef prices also weakened the final two days last week. Traders will watch for more weakness in the beef market that could signal a cyclical top in the beef product market.
