After the Bell | June 8, 2021

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Corn: July corn futures closed up 3/4 cent at $6.80 a bushel and December futures gained 6 3/4 cents at $6.09 1/2. Futures were unable to hold overnight gains, but still finished firm as a weather market continues. Monday was “another hot and stressful day” for crops, World Weather Inc. said, and recent outlooks convey little relief for parched fields across much of the Corn Belt this week. USDA’s weekly crop progress report, released late Monday afternoon, showed 72% of the U.S. corn crop rated “good” or “excellent” at the start of this week, down from 76% a week earlier and below analysts’ expectations for a reading of about 74%. When USDA's weekly condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (CCI; 0 to 500-point scale, with 500 representing perfect), the corn crop dropped 6.2 points to 381.8 points. Trading has turned choppy and volatile recently, typical of a serious weather market scare.

Soybeans: July soybeans firmed 19 3/4 cents to $15.80, while the November contract rose 17 cents to $14.57. Meal futures gained $2.50 to $3.60 through the December contract, while soyoil futures slipped from their daily highs but finished 113 to 125 points higher. New-crop soybeans were supported by initial USDA condition ratings which pegged a lower-than-expected 67% of the crop as “good” to “excellent.” While the critical development time for soybeans isn’t until later this summer, traders are still reactive to weather and crop ratings, as ending stocks aren’t projected to rise much in 2021-22. USDA is expected to mildly raise its new-crop ending stocks forecast on Thursday. Near-term weather forecasts suggest limited rains across dry northern areas of the Midwest, while rains are expected to be heavier and more widespread across southern and eastern areas of the Midwest.

Wheat: SRW wheat futures finished 4 to 5 cents higher, with September futures closing at $6.91 3/4. HRW contracts settled mostly 1 to 2 cents higher, while spring wheat finished as much as 13 3/4 cents lower. USDA’s spring wheat crop condition ratings dropped more than anticipated, providing initial price support, but active profit-taking developed after updated forecast models signaled better-than-previously-anticipated rainfall chances across the U.S. Northern Plains the remainder of the week. Heavy rains are also expected in the Canadian Prairies. If the forecast remains wet, there’s risk of additional price losses as traders will remove weather premium from the market.

Cotton: July cotton futures closed up 78 points at 85.14 cents and December gained 73 points at 85.99 to cents. Cotton was again lifted by firmer grain futures, as well as an upturn in the oil market, with Nymex crude on Monday hitting a 2.5-year high of $70 a barrel. Monday afternoon’s USDA weekly crop progress reports showed U.S. cotton at 71% planted as of Sunday, versus 76% one year ago and 78% for the five-year average. The slower planting pace so far this year was also friendly for the cotton futures market today. The USDA report showed 46% of the U.S. crop in good to excellent condition. Nine percent of the crop was squaring compared to 12% one year ago a 11% for the five-year average. West Texas is expected to see normal to above normal temperatures the bulk of this week and into next week, with isolated rains possible. Favorable near-term conditions are expected for the Delta region.

Hogs: August lean hog futures closed down $0.225 at $118.675. Most-active July slid $0.30 to $121.80. December futures gained $0.575 to $88.675 and hit a new contract high. Continued gains in the CME lean hog index (+1.76 to 116.51) and noon pork cutout value (+0.63 to 135.36) boosted the expiring June hog contract 0.80 to 120.70, while concerns about seasonally increasing supplies and diminishing demand during the summer doldrums weighed on deferred contracts. The current cyclical decline in hog supplies is being exaggerated by the industry’s approach to seasonal lows, which is playing a part in boosting hog and pork prices to levels only exceeded during the 2014 PEDv crisis. However, the prospect of seasonally increasing supplies, especially after early August, may limit short-term price strength.

Cattle: August live cattle settled 5 cents higher at $117.825, the contract’s first gain in four sessions. August feeder cattle ended 95 cents lower at $149.25, the contract’s lowest close in a week. Nearby live cattle futures paused as Choice beef cutout values this morning averaged $338.88 per hundredweight, up 28 cents from yesterday. Cutout values are down from a recent peak at $340.55 on June 3, but still up 62% from about $210 at the end of 2020. This week’s cash cattle activity started around $120 in the live market, about steady with week-ago. Feeder cattle were pressured by firmer corn prices amid growing concern over crop stress from heat and dryness in the western and northern Corn Belt.

 

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