After the Bell | May 28, 2021

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Corn: Futures slumped late in the session, with July ending 7 3/4 cents lower at $6.56 3/4 a bushel, the third consecutive weekly decline. December corn fell 9 1/2 cents to $5.45 1/2, down 1 cent from $5.46 1/2 a week ago. This week’s price action weakened the technical posture for corn, compounding a bearish weather outlook and the lack of any fresh export announcements today after rumors of fresh Chinese buying during the limit-up rally yesterday. Rain fell in much of the Midwest over the past day and more rain is expected, with temperatures seen warming next week after a brief cold snap. Corn planting is nearing completion and, as of May 23, the crop was 61% emerged, compared to the five-year average of 54%, the USDA reported. USDA releases its first crop ratings on Tuesday after the holiday weekend and most expected to see strong conditions to start the season.  

Soybeans: July soybeans closed down 6 1/2 cents at $15.30 1/2 and for the week rose 4 1/2 cents. July meal futures rose $5.20 at $395.50 and on the week fell $3.40. July soybean oil futures closed down 102 points at 65.79 cents and for the week rose 30 points.  After posting good gains Thursday, the soybean futures bulls could not muster the power to produce follow-through strength on Friday. That suggests a steady-lower start to the trading week next Tuesday, after the long holiday weekend. The weather in the U.S. Midwest clearly leans negative in the near term. Rain coverage was strong in the heart of the Midwest the past 24 hours but still on the lighter side in Iowa and nearby areas. Showers will be more scattered over the next five days. Meanwhile, the latest 6- to 10-day maps were a little drier but rains are expected to return after that period. It could frost in the far northern Corn Belt Friday night and traders will closely monitor weather reports Monday night when trading resumes.

Wheat:  July SRW futures were down 12 3/4 cents Friday to $6.63 1/2, capping a monthly drop of 71 1/4 cents. July HRW futures fell 13 cents to $6.13 ¾ and down 90 1/4 cents in May. September spring wheat futures fell 34 3/4 cents to $7.33 1/2 during May after rising 9 ¾ on Friday. The wheat markets closed mixed on Friday, with the approaching harvest in the southern Plains and Midwest keeping pressure on winter wheat futures.  U.S. hard red winter wheat areas would benefit from some drier weather soon. The region has been a little too wet recently, but yield potentials are mostly good. Grain quality concerns may rise in early maturing crop areas of the south. Wheat conditions in the northern U.S. Plains and Canada’s Prairies have improved after recent rain and temperatures will trend warmer. But conditions remain dry and much more rain will be needed in June. Winter wheat in Europe and parts of the CIS are in good shape as well, although dryness remains in Russia’s southern New Lands and northern Kazakhstan. These drier areas should get rain next week to offer partial relief.  

Cotton: July cotton fell 49 points to 82.12 cents, capping a 70-point weekly drop. December cotton was down 14 points to 83.32 cents on Friday, rising 10 points for the week. The market held key support this week with weather next week likely to dominate trade. Quiet finish to a choppy trading week that witnessed more price consolidation after earlier declines this month. Rains in West Texas and more in the forecast weighed on prices this week and dampened bullish enthusiasm from the positive weekly export sales data. Planting continues across the Texas Panhandle and southern Plains between spotty rains, as more northern growers scramble to meet the May 31 deadline for crop insurance coverage. However, drying in the southeastern U.S. this week is firming the soil and slowing crop development, but supporting aggressive fieldwork. Rain must develop soon to prevent some areas from becoming excessively dry. Parts of the region are already getting a little too dry. Traders will be watching to see if the high-pressure ridge forming in the Southeast continues to strengthen in June. Meanwhile, weather across the Delta will remain favorably mixed over the next couple of weeks.  

Hogs: August lean hog futures on Friday closed up $2.40 at $116.225 and hit a contract high. For the week, August hogs gained $4.20. Lean hog futures ended the last trading day of the month sharply higher, with new contract highs in several months and nearby futures reaching the highest price since 2014. Friday’s price action also produced technically bullish weekly and monthly high closes, to suggest follow-through buying interest on Tuesday when traders return from a long holiday weekend. Gains could be tempered Tuesday as cash hog bids slumped $3.48 on a national direct basis Friday after posting good gains and hitting seven-year highs earlier this week. The noon pork cutout value on Friday rose another $2.34, led by hams, with a solid 211.98 loads moved at midday.  

Cattle: Futures ended the week on a soft note amid slow cash market trading ahead of the three-day holiday weekend and small Saturday kill plans. August cattle fell 82.5 cents to $118.600 per hundredweight, down from $120.925 at the end of last week and the lowest close since May 17. August feeder cattle fell $1.50 to $151.35, down from $153.70 at the end of last week. Today’s bearish closes raises questions over how much upside cattle prices may have over the near-term and whether summer grilling demand has been filled. Direct cash cattle trade activity was subdued at the end of the week, even with meatpackers increasing slaughter slightly. Live steers averaged $119.27, the USDA reported this morning, down from $119.54 yesterday and down from $119.71 at the end of last week. Meatpackers slaughtered an estimated 629,000 head, down 40,000 head from last week as Saturday’s slaughter is estimated to fall 44,000 from last week, according to USDA.     

 

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