After the Bell | June 23, 2021
Corn: December futures led new-crop contracts lower, losing 3 1/4 cents to $5.35 3/4. Broad anticipation of improved Corn Belt growing conditions likely spurred widespread selling. The grain industry is looking for improved crop conditions on forthcoming weekly reports in the wake of the more favorable weather experienced recently and in light of forecasts for more of the same during the days ahead. Given the difficult environment that prevailed over much of the Corn Belt during spring, particularly in the Northern Plains, the market still remains cognizant of the potential for substantial production cuts if abnormal heat and/or dryness were to return to the region, particularly during the July pollination period. Traders are waiting for the USDA Acreage and Quarterly Grain Stocks reports due for release June 30.
Soybeans: November soybeans closed down 2 cents at $13.00 1/4 a bushel, while December soybean meal closed down $7.10 at $359.60 today after hitting a 4 1/2-month low. December soyoil closed up 155 points at 59.54 cents. Weather still leans bearish for the soy complex. World Weather in its midday update said less rain is expected for portions of southwestern Minnesota, northeastern Nebraska, eastern South Dakota and northwestern Iowa for today and Thursday. A boost in rainfall was seen from eastern South Dakota through southern Minnesota to southern Wisconsin and northern Illinois for Saturday and Sunday. The GFS model reduced upper Midwest rainfall next Monday into Wednesday next week and in parts of western Iowa for the same period of time. Still, soil moisture in much of the Corn Belt is getting recharged heading into the historically warmer and drier months of July and August.
Wheat: July SRW futures rose 10 1/4 cents to $6.61 1/4. July HRW futures rose 15 1/2 cents to $6.12, up almost 6 cents on the week. September spring wheat rose 19 1/2 cents to $8.02 1/4, the contract’s highest closing price since June 4. Spring wheat again led gains across the wheat complex as prolonged heat and dryness in the Northern Plains hamper crop prospects. There are still many concerns over the upper U.S. Midwest, northern Plains and Canada’s Prairies’ long-term outlook because of heat and dryness, World Weather Inc. said in a report. The Northern Plains “will get some rain in the coming week, but not enough to counter evaporation or to bolster topsoil moisture for very long. Concern about dryness in these areas will continue, although the situation is not expected to deteriorate until the first weekend in July as drier and warmer weather begins to evolve.”
Cotton: The expiring July contract surged 224 points to 86.46 cents per pound, while most-active December advanced 130 points to 86.94 cents. Despite anticipation of seasonally diminishing export shipments in the weeks just ahead, as well as improved growing conditions in the Southern Plains, cotton futures posted a strong performance. Demand for U.S. cotton has remained consistently robust into mid-2021 despite the sustained price firmness experienced during that timeframe. A significant portion of that strength has come from the export sector, as indicated by shipments regularly topping 300,000 running bales per week. Indeed, given the strength exhibited late in the session, one almost has to suspect traders are expecting more big sales and shipments totals on the weekly Export Sales report
Hogs: Lean hog futures continued their steep slide amid generally declining pork product prices and worries about demand for U.S. pork. USDA’s monthly Cold Storage Report Tuesday afternoon was deemed bearish. USDA estimated U.S. frozen pork stockpiles as of May 31 at 461.1 million pounds, down 1.5% from a year earlier but up 0.9% from the end of April, suggesting a slowdown in U.S. pork exports. The noon pork report today showed pork cutout value up $2.60 at $108.98. Movement was decent at 206.83 loads. Today’s national direct average hog price was up $2.60. Today’s hog slaughter was estimated at 476,000 compared to 477,000 last Wednesday and 471,000 at this time a year ago. Traders are awaiting USDA’s Quarterly Hogs & Pigs Report on Thursday, which is expected to show the total U.S. hog herd as of June 1 down about 2.3% from the same date a year earlier.
Cattle: August live cattle futures fell 30 cents to $128.875. Feeder cattle finished $1.80 to $2.65 lower, with August down $2.65 to $155.70. Live cattle futures faded despite firmer cash cattle in light dealings so far this week. Traders took some profits out of the long side of the market as they awaited active cash cattle trade and started to prepare for Friday’s Cattle on Feed Report. With active cash cattle trade not expected until later in the week, more pre-report positioning is likely tomorrow. Feeder cattle futures erased most of Tuesday’s gains, despite weakness in corn futures today. Given the favorable rainfall outlook for roughly two-thirds of the Corn Belt over the next 10 days, corn has more near-term downside risk, which should limit selling in feeder cattle.
