After the Bell | June 16, 2021
Corn: July corn futures finished 5 1/2 cents higher at $5.73 a bushel, while new-crop December futures fell 1 1/4 cents to $5.72 1/2. Late-session weakness suggest a fresh round of price pressure may develop overnight and during Thursday’s session if rain is still forecast for the Midwest. The midday GFS weather model reduced rain chances in areas of the northwestern Corn Belt but was wetter for next week across much of the region. World Weather Inc. doesn’t believe this rain event will be a “fix-all” event for soil moisture deficits across the region, but based on the late price action, traders believe enough areas will benefit. Given the heightened focus on weather and the fact funds still hold a net-long position, there’s risk of additional liquidation pressure if the forecast remains wet.
Soybeans: July soybeans closed down 17 1/4 cents at $14.48 1/2 a bushel, a seven-week low, while July soybean meal closed up $6.80 at $379.20 and July soyoil closed down the 350-point limit at 62.07 cents. Midwest crops are expected to benefit from rain and milder conditions next week. Midwest rains will be highly varied over the next 10 days, said Worldwide Weather, as 0.50 to 1.50 inches will occur in general, with local totals over 2 inches. Moisture deficits will be reduced in the northwestern Corn Belt, but not eliminated. Drier and warmer weather will return in late June and continue into early July in the western Corn Belt.
Wheat: July SRW futures firmed 1 1/4 cents to $6.62 3/4, while July HRW futures fell 2 cents to $6.10 3/4. September spring wheat jumped 11 1/4 cents to $7.66 1/2. Wheat markets were pressured by continuing declines in corn and soybean futures, as well as the accelerating winter wheat harvest and favorable weather forecasts for the Southern Plains. As of Sunday, 4% of the U.S. winter wheat crop was harvested, 11 points behind the five-year average. Corrective buying lifted spring wheat futures, while the GFS weather model reduced rain chances from northern North Dakota to northwestern Minnesota this weekend. The USDA’s export sales report tomorrow is expected to show wheat exports of 200,000 MT to 500,000 MT for the week ended June 10.
Cotton: July cotton rose 5 points to 85.33 cents and December cotton fell 85 points to 85.95 cents. Cotton traded in a narrow range as traders awaited the USDA’s weekly export sales report tomorrow. Spillover pressure from slumping corn and soybean futures weighed on cotton, while hot, dry conditions in major U.S. cotton states, along with optimism over the U.S. economy, continued to underpin the market. Warm to hot and dry conditions continued in much of the Delta and the Southeast early this week, according to World Weather Inc. West Texas had isolated showers early this week, but much of the rest of the week is expected to be mostly dry, with temperatures near to above-normal.
Hogs: August through December lean hogs futures closed down the $3.00 limit, setting three-week lows, with the August contract settling at $111.70. Expectations for higher pork supplies coming to market starting in August weighed on futures, though pork belly and ham stockpiles remain tight. National direct cash hog prices today were up an average of 76 cents at $122.14. The noon pork report showed cutout value up $1.89, led by strong gains of $36.81 in bellies. Movement was good at midday, at 219.22 loads. Today’s hog slaughter was estimated at 483,000 head, compared to 485,000 last Wednesday and 464,000 head one year ago at this time. Another negative for U.S. pork export potential is news that China’s pig herd surged 23.5% in May compared with the year prior, according to state media.
Cattle: August futures settled $1.025 higher at $124.925 after reaching a fresh contract high at $125.775 in late-morning action. News that early-week country trading at $124.00 wasn’t a one-time phenomenon, with some Texas trading reportedly at $122, as opposed to flat trading around $120 over the past few weeks. Choice beef cutout fell $2.92 to $331.51 at midsession, which probably spurred profit-taking by bulls. Ultimately, the sustained beef market strength seen during the past few weeks is almost surely providing the lion’s share of the cattle price strength lately. The cattle market seems to be only belatedly reacting to the wholesale gains, which have put carcass values far above all former quotes, with the exception of the spring 2020 spike caused by Covid-related packing plant shutdowns.
