After the Bell | June 15, 2021
Corn: New-crop futures fell for the third straight day, with the December contract settling 7 1/2 cents lower at $5.73 3/4 a bushel, near a two-week low. Rain and cooler temperatures forecast for much of the Midwest next week are expected to relieve stressed acres. The central U.S. will experience another few days of high temperatures, followed by milder weather for most of the U.S. Plains and Midwest this weekend and next week, according to World Weather Inc. “Another round of rain advertised for June 23-25 will be important in maintaining improvements in soil moisture that result from rain this weekend, with some beneficial rain likely in the driest areas from the eastern Dakotas into northern Wisconsin,” the weather watcher said in a report today. Traders looked past further deterioration in the USDA’s crop ratings. USDA rated 68% of the U.S. corn crop “good” to “excellent,” as of Sunday, a four-point slide from last week and a point lower than analysts expected on average.
Soybeans: July soybean futures finished 6 1/2 cents lower, while the August through March contracts dropped 15 1/4 to 21 3/4 cents. Meal futures ended $1.50 to $5.70 lower through the December contract. Soyoil dropped 39 to 59 points through the December contract. Traders ignored the bigger-than-expected five-point drop in soybean crop condition ratings USDA reported Monday afternoon. Instead, they focused on cooler, wetter weather forecast for the weekend through next week. The midday GFS weather model reduced rain for much of the Midwest June 22-24, which moved futures off their lows into the close. NOPA data this morning showed the crush pace down from year-ago but up from April at 163.5 million bushels. That implies a full crush of 173.5 million bu. for the month. To reach USDA’s old-crop crush forecast of 2.175 billion bu., the crush pace over the final three months of 2020-21 needs to total 531 million bu., down 5 million bu. from the same period last year.
Wheat: July SRW wheat closed down 13 cents at $6.61 1/2 a bushel and July HRW wheat closed down 15 1/4 cents at $6.12 3/4. September spring wheat rose 1 1/4 cents to $7.55 1/4. Winter wheat futures were pressured by losses in the corn and soybean markets. Spring wheat futures rebounded from daily lows by the close and that allowed the winter wheat futures to close near mid-ranges. The likely increase in U.S. wheat harvesting in the near term is expected to weigh on futures markets, and weather forecasts for U.S. wheat country are mostly favorable for harvest the next two weeks. As of Sunday, USDA reported only 4% of the U.S. winter wheat crop was harvested, which is 11 points behind the five-year average.
Cotton: July cotton closed up 33 points at 85.28 cents today and nearer the session high, while December cotton rose 67 points at 86.80 cents. Cotton futures today were supported in part by the S&P 500 and Nasdaq stock indexes hitting record highs in early trading, suggesting American consumers are recovering from the pandemic, which bodes well for demand for the fiber. Weather in West Texas saw isolated showers Monday, but it’s expected to be mostly dry Tuesday-Friday. Temps will be near to above normal. Monday’s USDA crop progress reports showed U.S. cotton at 90% planted as of Sunday, compared to 87% last week and 89% one year ago. Squaring was 13% versus 16% a year ago. The cotton crop’s good to excellent rating by USDA was 45%, with 45% fair and 9% poor to very poor condition.
Hogs: Hog futures followed through upon Monday’s sharp wholesale-market driven losses in early Tuesday trading. However, concurrent strength in the cattle and beef complex, as well as a strong midday recovery in pork prices spurred a sustained comeback. Nearby July hogs ended the day edging up 27 1/2 cents to $118.50, while most-active August futures slipped 10 cents to $114.70 at the close. After having seen pork cutout dive Monday, traders seemed to expect more of the same today, despite the historical tendency for cash hog and pork quotes to remain quite strong through June. The fact that the CME lean hog index is expected to rise another 77 cents to $122.66 tomorrow, along with the $3.58 jump to $195.48 by the midday pork cutout quote likely encouraged fresh buying in the hog pit.
Cattle: Live cattle futures finished near session highs with gains of $1.325 to $2.625 through the December contract. August futures settled at $123.90, its highest close since April 8. Feeder cattle pulled back from session highs but still ended 90 cents to $2.225 higher. Feeder cattle futures were supported by weakness in the corn market. Given elevated prices for corn, feeder cattle will continue to mirror corn trade. Live cattle futures were initially influenced by the strength in feeder cattle, though some early firmer trade in the cash cattle market sparked the rally into the close. There were reports of cash trade around $122 in the Southern Plains and $124 in the northern market. While trade was light, there’s a clear firmer bias from last week’s average of $120.03.
