After the Bell | June 18, 2021
Corn: July corn futures rose 22 1/4 cents to $6.55 1/4 a bushel, while December futures gained 33 3/4 cents to $5.66 1/4, down 7.1% from $6.09 3/4 a week ago. Corn posted a sharp recovery following steep declines the previous four days, as dry conditions in the U.S. Midwest remain troublesome. Forecasts continue to call for rainfall and cooler temperatures across much of the Midwest into the early part of next week, though amounts are expected to be light in western and northern areas and most of Iowa remains under drought conditions. The USDA’s next weekly crop condition ratings, scheduled to be released Monday afternoon, will be scrutinized for signs of improvement. USDA rated 68% of the U.S. corn crop “good” to “excellent,” as of June 13, a four-point slide from a week earlier and down from 71% at that time in 2020.
Soybeans: July soybeans jumped 66 1/4 cents to $13.96/bushel, while November leapt 60 1/4 cents to $13.13. July soybean oil rebounded 1.55 cents to 58.12 cents a pound and July soymeal surged $11.90 to $373.40 a ton. Next week’s action will depend on rainfall in the Corn Belt and the USDA’s Crop Progress report Monday. If USDA indicates crop conditions have been helped by the more moderate weather prevailing lately and/or conditions appear more favorable next week, the new-crop contracts could decline accordingly. However, news that China bought at least eight cargoes totaling 480,000 MT of soybeans could give the old-crop contracts a boost.
Wheat: July soft red winter wheat futures rose 23 3/4 cents to $6.62 3/4 a bushel, down 18 cents for the week. July hard red winter wheat futures rose 21 1/4 cents to $6.06 1/2 and September spring wheat rose 10 cents to $7.66 1/4. The wheat markets may continue to look to corn and soybean for direction. Further price declines to the $6.00 area in SRW futures can’t be ruled out in the near term, unless export demand improves or the U.S. harvest proves disappointing. Declines this week weren’t as severe for spring wheat futures compared to winter wheat amid ongoing concerns over extreme heat and dryness in the Northern Plains and deteriorating USDA crop condition ratings.
Cotton: July cotton futures rose 25 points to 84.42 cents, down 258 points on the week. December cotton rose 112 points to 85.18 cents. Weather in major U.S. cotton regions will be watched closely. A tropical cyclone in the Gulf of Mexico is not expected to negative impact the Delta’s cotton crop, while the Southeast could benefit as the storm pushes moisture into the U.S. Traders are looking to the June 30 USDA acreage report for a better idea on the cotton-harvest outlook for the U.S. 2021-22 crop. In March, the USDA estimated all cotton planted area for 2021 at 12 million acres.
Hogs: July and August futures fell $2.325 and $0.525, to $108.675 per hundredweight and $106.675, respectively. Ongoing shifts in the wholesale and cash markets should continue to influence futures’ direction. Packers will likely pursue hogs somewhat more aggressively as they seek to reduced short-term supplies ahead of the July 4 holiday. The USDA’s next Quarterly Hogs & Pigs report June 24 will offer insight into pork supplies in the second half of 2021 and beyond. Hog supplies typically fall to their lowest levels of the year in late June and early July, which should support the cash hog and wholesale pork markets. Ham and belly stocks remain tight, but overall pork stockpiles are poised to increase later in the summer.
Cattle: August live cattle futures rose 45 cents to $121.55 per hundredweight, up from $120.025 at the end of last week, while August feeder cattle fell $2.375 to $155.025. If the cash market’s upward momentum continues, futures have potential to make a run at the contract highs reached June 16. Live steers sold for $122.64 to $123.23 early Friday, based on negotiated sales. By comparison, live steers averaged $120.03 the previous week. Boxed beef prices appear to have peaked in early June and may continue to slip with retailer buying for the July 4 holiday winding down. Traders await the USDA’s next monthly Cattle on Feed report June 25. In the previous report, the USDA pegged cattle placed on feed during April at 1.82 million head, up 27% from 1.43 million head during the same month in 2020.
