After the Bell | June 30, 2021

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Corn: Futures surged the daily 40-cent limit in September, December, March and May contracts, with December settling at $5.88 1/2, a 2 1/2-week high. Corn will trade with an expanded, 60-cent limit tomorrow. Grain markets rallied after USDA’s acreage projection fell more than 1 million acres short of analysts’ expectations. U.S. farmers planted an estimated 92.692 million acres to corn this year, USDA said today in its Acreage Report. While today’s USDA figure was up over 1.5 million acres from its March forecast, it was far short of the 93.787 million the market expected. In a separate report, USDA estimated total U.S. corn stockpiles as of June 1 at 4.112 billion bu., slightly below trade expectations and down 18% from the same date in 2020. Today’s acreage surprise will force a reassessment of the corn market’s direction and place renewed focus on Midwest weather patterns in July as the critical pollination phase approaches.

Soybeans: July soybeans leapt 90 1/4 cents to $14.50 a bushel, while November surged 86 1/2 cents to $13.99, near a three-week high. December soybean oil jumped 1.47 cents to 62.76 cents per pound, while December soymeal climbed $27.90 to $381.70 per ton. USDA’s surprisingly low U.S. soybean plantings and stockpiles estimates stoked concerns over tight supplies. USDA’s estimate of 2021 U.S. soybean plantings, at 87.555 million, acres fell short of industry expectations closer to 88.955 million acres. In USDA’s quarterly Grain Stocks report, June 1 U.S. soybeans supplies totaled an estimated 766.8 million bushels, below the 787 million analysts expected. The lower plantings figure seems likely to have a sustained impact on prices. Traders will also turn their attention quickly to tomorrow’s USDA Export Sales report and July weather, which may bring warmer weather for the Midwest.

Wheat: December SRW wheat rose 31 3/4 cents to $6.85 a bushel, reaching a two-week high. December HRW wheat rose 31 cents at $6.67. Spring wheat futures rose 35 1/4 cents to $8.49 3/4, after notching a contract high at $8.59 3/4. Nearby spring wheat futures are trading at the highest levels since early 2013. Wheat futures were supported by rallies in corn and soybean markets and continued scorching temperatures in the Northern Plains. USDA’s acreage report today was mostly neutral for the wheat market, with all U.S. wheat plantings estimated at 46.743 million acres, up 385,000 acres from USDA’s March intentions and 803,000 acres above the average pre-report estimate. Spring wheat plantings, at 11.58 million acres, declined 160,000 acres from a March estimate, but were 172,000 acres higher than traders expected. In a separate report, USDA’s estimate for June 1 U.S. wheat stocks was 15 million bu. lower than the average analyst estimate and down 18% from last year.

Cotton: July cotton futures closed down 246 points at 84.03 cents and December cotton lost 268 points at 84.90 cents. Market pressure stemmed from improving weather conditions in U.S. cotton country and a rise in the U.S. dollar index today to a 2 1/2-month high, suggesting the U.S. fiber may be less competitive on the world market. World Weather Inc. reported today West Texas will receive more rain Friday and Saturday nights, with sporadic showers also popping up periodically. The U.S. Delta and Southeastern states will experience a good mix of rain and sunshine over the coming week. USDA estimated cotton seedings at 11.719 million acres, down 317,000 acres from USDA’s March forecast and 137,000 acres below trade expectations.

Hogs: Hog futures ended mixed, with July gaining 50 cents to $107.475 per hundredweight and most-active August sliding 37.5 cents to $103.25. Hog futures are caught between seasonally elevated cash values and bearish expectations for prices during the second half of the year. The CME Lean Hog Index came in at $112.13 today, meaning July futures is discounted by about $4.75 with 10 business days of trading before expiration. At midday, pork carcass cutouts averaged $115.24, up $1.02 from yesterday, while carcasses ranged from $109.89 to $112.75 on direct markets, USDA reports showed.

Cattle: August live cattle rose 80 cents to $122.725 per hundredweight, while August feeder cattle fell $2.775 to $154.625, the lowest close in over two weeks. Feeder cattle futures tumbled after USDA’s unexpectedly low corn acreage estimate triggered a rally in corn futures. The lower-than-expected corn planting suggests corn supplies following this year’s harvest will be smaller, pushing up feeding costs for the cattle industry as it competes with exporters, ethanol producers and other corn users. Live cattle futures held largely within the range from the past week as traders waited for cash markets to develop. Early today, live steers in five top cattle areas averaged $121.84 per hundredweight, based on negotiated cash sales, USDA reported. By comparison, live steers averaged $124.98 yesterday and last week average $125.47. Boxed beef firmed slightly, with choice cutouts averaged $292.80 early today, up 46 cents from yesterday.

 

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