After the Bell | June 3, 2021

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Corn: July futures fell 13 cents to $6.62 a bushel and December fell 6 1/4 cents to $5.66 1/2. Pressure stemmed from strong USDA crop ratings earlier this week and from forecasts suggesting improved rainfall chances for some parts of the Midwest. Some weather models today boosted projected rains for east-central North Dakota into nearby Minnesota Saturday into Monday. However, the estimated increase “is likely overdone,” according to World Weather Inc. Heat and dryness continued to underpin the market, even with the USDA rating 76% of the corn crop in “good” or “excellent” condition to start the week. Temperatures are expected to near or surpass 90 degrees F in the Corn Belt this weekend. Before the reopening, USDA did not announce any new private exporter sales this morning, which may have pressured nearby futures amid recent talk of new Chinese purchases.

Soybeans: July futures fell 13 1/4 cents to $15.49 1/4 and November futures dropped 10 1/4 cents to $14.03 1/2. September meal fell $2.10 to $3.92.80 and September soyoil fell 98 points to 63.98 cents. It was a choppy trade with prices erasing earlier gains as midday forecasts were for better rains in the Northern Plains, parts of the eastern Midwest and from the Delta to the Southeast. However, the center of the nation looks dry the next eight days and temperatures will be well above normal the next five days. Commodity Weather Group sees dryness issues expanding in the western Midwest in the second half of June, but cooler temperatures should help to limit stress. USDA’s weekly export sales report tomorrow is expected to show a net reduction of 100,000 MT to a gain of 200,000 MT in old-crop sales. New-crop sales are seen between none and 400,000 MT. 

Wheat: July SRW wheat fell 10 3/4 cents to $6.76 1/4 today and July HRW wheat fell 9 1/2 cents to $6.24 1/4. September spring wheat futures slipped 5 1/2 cents lower to $7.82 3/4. Weakness in corn and soybean futures prices spilled into wheat markets. Concern remains over this week’s hot and dry weather in the northern U.S. Plains and southern Canada’s Prairies, but some rains may develop next week, which has capped spring wheat’s rally, at least for the moment.  U.S. spring wheat this week was rated just 43% “good” and “excellent,” with 80% of the crop emerged. Improving weather for U.S. hard red winter wheat harvesting is expected but it will be a slow process. Friday morning’s weekly USDA export sales report is expected to show U.S. wheat sales of 175,000 to 500,000 MT.

Cotton: July cotton rose 44 points to 84.21 and December futures rose 38 points to 85.04 cents. Cotton held relatively firm today in the face of weaker grains, a stronger dollar and a retreat in U.S. stock prices. Traders awaited Friday’s export sales report with anticipation after better sales last week that included new business with China, Pakistan and Turkey. Another week of strong sales and shipments will increase speculation USDA will raise its export forecast and cut ending stocks in the June 10 Supply & Demand Report. Forecasts show some rain and showers for much of Texas and the Southeast. Recent rains in parts of Texas have helped to get seeds in the ground, but more is needed for early development. The Southeast has been very dry the past month, but weather models are pointing to rains coming over the next week.

Hogs: July lean hogs rose $0.525 to $119.00 per hundredweight and October futures rose $1.05 to $95.625. Nearby hog futures remained near seven-year highs amid ongoing strength in wholesale pork markets. Pork cutout values today rose another $2.24 to an average of $131.83 per hundredweight, up 68% from the end of 2020 and the highest in nearly seven years, according to USDA data. On cash hog markets, carcass values this morning ranged from $92.85 to $111.75 per hundredweight, compared with an average of $108.65 Wednesday. Lean hog futures prices are approaching highs last seen in mid-2014. Key to further strength will be export demand for U.S. pork, with traders scrutinizing Friday’s USDA weekly export sales. Elsewhere, hog prices in China continue to fall, with the country’s national cash price sinking to two-year lows.

Cattle: August live cattle closed down $0.725 at $118.525 and near the today’s session low. August feeder cattle closed up $0.625 at $152.95. The cattle futures markets late this week have become more orderly after the cyberattack on JBS stirred concern over disruptions to meat supplies. Feeder cattle futures were supported today by lower corn futures prices. Cash cattle trade picked up Wednesday in Iowa at $119 to $121, in Kansas and Texas, mostly around $120, and in Nebraska from $120 to $122. Steady to firmer cash prices are a positive signal that cattle are making cycle lows. Futures remain generally supported by ongoing strength in beef prices, which this week reached the highest levels since the pandemic-driven spike about a year ago. Market-ready cattle supplies will remain heavy and may slow recoveries in futures and cash prices.

 

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