After the Bell | June 9, 2021
Corn: July corn ended 10 3/4 cents higher at $6.90 3/4 a bushel, while December corn firmed 1/4 cent to $6.09 3/4. Bull spreading supported corn futures ahead of Thursday’s USDA Supply & Demand Report. We believe USDA may raise its old-crop corn-for-ethanol use and exports tomorrow morning. USDA is also expected to slightly reduce its old- and new-crop ending stocks forecasts from last month to 1.207 billion bu. and 1.423 billion bu., respectively. Traders will respond if there are any surprises – bullish or bearish – but attention should quickly return to weather. Midday forecast models were drier than previously advertised for portions of the Corn Belt the remainder of this week and next. Of particular interest will be any rains across dry western and northern areas of the region. World Weather Inc. expects just light and scattered rains over the driest areas.
Soybeans: July soybeans fell 17 1/2 cents to $15.62 1/2 a bushel and November fell 8 3/4 cents to $14.48 1/4. July soybean meal fell $3.40 to $386.40 and July soybean oil fell 49 points to 71.59 cents. Price pressure stemmed from scattered rains in the forecasts for the western and northern areas of the Corn Belt in coming days—but certainly not the widespread precipitation that’s needed. World Weather today said the Midwest will see warm temperatures and more sunshine than rain through the next two weeks. Some relief from dryness occurs in the northwest, but coverage of significant rain may not be great enough to prevent an overall increase and expansion of crop stress. USDA’s Supply and Demand report Thursday is expected to show a slight increase old- and new-crop soybean ending stocks compared to the May report. Soon after the USDA report is out, focus will likely turn quickly back to weather.
Wheat: July SRW wheat closed down 2 3/4 cents at $6.82 1/4, July HRW wheat closed up 3 1/4 cents at $6.35 3/4 and September spring wheat fell 6 1/4 cents to $7.69 3/4. Spring wheat continued as the price leader this week, pressured today by beneficial rainfall coming to dry regions of the northern Plains, and more in the forecast. World Weather said rainfall today through Friday will further improve soil moisture in a majority of the region, but southern Montana will see net drying. Conditions are expected to be favorable for fieldwork in much of the U.S. hard red winter wheat region the next 10 days to two weeks. Thursday morning’s USDA supply and demand report. No major changes are expected from the May report.
Cotton: July futures rose 148 points to 86.62, while new-crop December rose 135 points to 87.34. Traders added to long positions ahead of USDA’s June Supply & Demand Report tomorrow morning. Traders expect USDA to cut its old- and new-crop ending stocks forecasts from last month. For 2020-21, traders anticipate a higher export forecast from USDA even after it hiked that category by 500,000 bales last month. Weather is price-supportive for new-crop cotton. West Texas is expected to be exceptionally hot the next couple days. Scattered showers and slightly cooler temps are likely from the weekend into next week, though crops will be stressed in areas that didn’t receive recent rains. There is also some mild dryness in Georgia and the Carolinas, while areas of the mid-South are experiencing flooding after recent rains.
Hogs: July lean hogs fell 30 cents to $121.50 per hundredweight, while June futures climbed to a seven-year high for the nearby price. Strong cash markets continued to underpin futures in a somewhat sideways trading day following the contract highs reached earlier this week. The CME lean hog index rose $1.26 to $117.77. The national direct cash carcass price this morning averaged $110.01 and ranged from $100.47 to $125, according to USDA. While the average was down from $112.34 yesterday, it still exceeds the five-day rolling average of $106.29. On wholesale pork markets, prices continued to creep toward all-time highs set in July 2014, with the primal cutout average this morning reported at $135.06, up 12 cents from yesterday and up 26% since the end of April.
Cattle: August live cattle rose $0.45 to $118.275 per hundredweight, while the expiring June contract added $0.675 to settle at $117.40. August feeder cattle fell $0.975 to $148.275 and September lost $1.20 to $150.75 amid a fresh surge in corn futures. The cattle market continues garnering support from the wholesale market, where choice beef cutout rose 88 cents to $339.49 per hundredweight at noon. Select cutout climbed $1.82 to $308. Current beef quotes lag only last year’s COVID-driven spike as the highest wholesale prices on record, again reflecting robust consumer demand. After a few fed cattle traded around $119-$121 Tuesday, there was apparently little follow-up activity today, but the early-week trade may indicate packers will be more aggressive buyers later in the week. Concerns about summer market weakness are likely to remain an obstacle to sustained strength. Feeder demand is likely to continue suffering until cattlemen see moderating feed costs.