After the Bell | June 28, 2021

Corn: July futures rose 39 cents to $6.75 1/2 a bushel, while December rose 28 cents to $5.47 1/4. Coming out of a weekend that produced a mixed bag of weather for the Midwest, the speculators decided to add some length in corn futures just ahead of the historically warmest and driest two months of the growing season. While much of the Corn Belt received beneficial rains the past three days, significant portions of the region did not, and remain worrisomely dry. USDA’s weekly crop condition report today showed U.S. corn rated “good” or “excellent” as of yesterday at 64%, an unexpected drop from 65% the previous week and the fourth consecutive decline. Analysts expected a good-to-excellent rating of about 66%. The market awaits Wednesday’s USDA acreage and grain stocks reports.

Soybeans: November soybean futures rallied 42 3/4 cents to $13.12 1/2. July soybean meal rose $4.40 to $351.60 per ton and soybean oil rose 260 points to 62.31 cents. Soybean futures’ gains stemmed in part from technical recovery driven by beliefs the market was oversold after heavy losses the previous two weeks. The widespread rainfall across much of the Midwest has been absorbed by the market, and focus is shifting to potentially hot July weather and persistent dryness in certain pockets of the Midwest. A high-pressure ridge “will slowly drift more into the Plains by the end of the second week of July bringing warmer and drier conditions to the western Corn Belt,” World Weather Inc. said today. In USDA’s weekly crop condition report today, 60% of soybean acreage was rated “good” or “excellent” as of the start of this week, unchanged from the previous week and below expectations for an improvement to about 61%.

Wheat: Spring wheat futures closed 22 to 27 cents higher in the most actively traded contracts. July SRW futures rose 9 cents to $6.46 a bushel and July HRW rose 17 3/4 cents to $6.18. Spring wheat was supported by heightening crop concerns. A strong high-pressure ridge in the far western U.S. is expected to move eastward, bringing the record temps currently in the Pacific Northwest into the Northern Plains to go along with already parched soils. USDA today reported 20% of the spring wheat crop in good-to-excellent condition, down from 27% from a week ago and 69% a year ago. The winter wheat crop was 33% harvested as of Sunday, up from 17% a week earlier but behind the five-year average of 40%.

Cotton: Cotton futures finished near the middle of today’s range, with gains of 23 to 32 points through the March contract. Strength in row crop markets boosted cotton futures today, cotton buyer interest was light. Buying was limited by weekend rainfall across cotton areas of West Texas, though rains were highly varied, with localized flooding in some areas, while others got little rainfall. Overall, conditions have improved and much of the Texas cotton crop has sufficient moisture for normal development. Traders await Wednesday’s planted acreage update from USDA. Based on pre-report estimates, analysts expect cotton acreage to decline around 180,000 acres from March intentions.

Hogs: Lean hog futures rose sharply, with the July, August and October contracts climbing the initial daily limit of $3. The daily price limit will expand to $4.50 tomorrow. Futures surged in a continuation of Friday’s technical bounce amid beliefs the market was extremely oversold following steep declines the previous two weeks. Traders are now waiting for signals from this week’s cash markets. Direct market carcass values early today ranged from $109.89 to $122. On Friday, carcasses averaged $116.89, down from $122.62 a week earlier, according to USDA. Carcass cutout values early today averaged $115.12 on about 151 loads, up $5.08 from Friday. USDA’s Hogs and Pigs report last week indicated that market-ready supplies will be larger than expected through summer, though still down around 1.5%.

Cattle: August live cattle closed down $1.20 at $121.60 per hundredweight, while August feeder cattle closed down $3.20 at $156.35. Strong gains in corn futures today pressed the feeder cattle futures market, spilling over into live cattle futures. Traders quickly moved on from last Friday’s monthly USDA Cattle on Feed Report, which was considered mostly neutral for futures. Placements were lighter than expected, limiting selling pressure in deferred live cattle futures today. Cattle traders are waiting for cash markets to develop this week. We look for cash cattle trade this week to be steady-firmer. Any continuation in cash cattle market strength should limit losses in the futures markets. Live steers in top U.S. cattle markets averaged $125.47 per hundredweight last week, according to USDA.