After the Bell | June 7, 2021

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Corn: July futures finished 3 1/2 cents lower, while December futures gained 11 1/4 cents. Bulls have to be disappointed after futures gapped higher overnight and sharply extended gains. While the price gaps remain open on the daily price charts, the finish was relatively poor as bullish momentum faded. Overnight trade and Tuesday’s price action will be driven by USDA’s weekly crop condition ratings and updated weather forecasts. The near-term weather outlook is somewhat of a mixed bag, with western and northern areas of the Corn Belt expected to be hot with limited rainfall chances, while the southern and eastern Corn Belt, along with the Delta and Southeast are expected to receive rains. Futures are likely to ebb and flow with each new forecast model run, given heightened emotions in a weather market, especially with elevated prices. Weekly corn export inspections were at the low end of pre-report expectations and down sharply from the previous week at 55.6 million bushels.

Soybeans: July contracts fell 23 1/2 cents to $15.60 1/4, while November rose 4 1/2 cents to $14.40, after reaching a contract high at $14.80. July soymeal fell $9.30 to $386.90 per ton and July soyoil dropped 51 points to 70.83 cents, after earlier reaching a record high on the continuation chart. Unwinding of bull spreads and signs of softer demand weighed on nearby futures but concerns over extreme heat and dryness in the western and upper Midwest continued to support new-crop contracts. Trade tomorrow will be partly focused on USDA’s first national soybean crop ratings. The soybean’s crop condition is expected to be about 70% “good” or “excellent,” based on analyst estimates, compared to 72% good-to-excellent at this time last year. Weekly soybean export inspections totaled 237,108 MT, within the pre-report range of estimates from 100,000 MT to 300,000 MT.

Wheat: July SRW wheat fell 7 3/4 cents to $6.80 and July HRW wheat fell 6 1/2 to $6.30. Spring wheat futures pushed to new contract highs early today before slumping, with July futures down 27 3/4 cents to $7.85. HRS wheat led the early charge in wheat futures today, but the buyers quickly became exhausted. The early support came from weather concerns regarding the spring wheat crop. The Canadian Prairies received some good rains over the weekend, and more are expected this week. However, little relief from moisture stress is expected in the U.S. Northern Plains, which should limit the downside in HRS futures, unless the forecast shifts wetter. USDA’s weekly crop progress report is expected to show the U.S. spring wheat condition at 40% in the good to excellent categories, compared to 43% last week, and last year at this time 82% good to excellent.

Cotton: July cotton futures finished low-range and down 144 points for the day. December cotton ended 62 points lower and also low-range. The cotton market rode the wave of strong buying in the row crop markets overnight and early in daytime trade. But as buyer interest faded in those markets, so did it in cotton. Trade on Tuesday will be centered on USDA’s weekly crop condition data, weather and preparations for Thursday’s USDA Supply & Demand Report. West Texas will be hot and dry the bulk of this week, though rains are expected this weekend into early next week. Dry areas of the Southeast could also receive some rains, though coverage in Georgia and the Carolinas will be key to the level of relief for the cotton crop in that region.

Hogs: July lean hogs rose $1.50 to $122.10 per hundredweight today and August rose $1.325 to $118.90. June futures reached $123.60, a seven-year high for a nearby contract. Strong cash market fundamentals continue to support hog futures, with national barrows and gilt carcasses averaging $109.40 per hundredweight at the end of last week, up from $105.32 the previous week. On national direct markets, carcass values ranged from $99.74 to $125 this morning, according to a USDA report. The average national direct cash price was 85 cents higher this morning. Wholesale pork markets also remain firm. The cutout value is nearing the all-time high of $137.56 posted in July 2014.

Cattle: August live cattle closed down $0.30 at $117.775 today and near mid-range. August feeder cattle closed up $0.275 at $150.20 today and nearer the session high. The cattle futures markets rebounded from session lows as the corn futures market backed way off its daily highs. Feeder cattle will remain very sensitive to day-to-day price movement in corn given elevated feed prices. Cattle traders are keeping an eye on very hot weather in the U.S. Plains that could start to stress cattle if the heat persists. Seller interest in live cattle futures was again limited by the discount futures hold to the cash cattle market. Last week’s average cash cattle price was $119.92, up 28 cents.


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