After the Bell | November 11, 2021

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Corn: December corn futures rose 1/4 cent to $5.69 1/2, the third consecutive daily gain and the highest closing price since $5.73 on Nov. 2. Futures rose earlier in the session on spillover from the wheat market’s rally to multi-year highs but quickly faded. Upside momentum was limited by bearish numbers in USDA’s Crop Production report Nov. 9, along a report today that Brazil’s crop agency Conab raised its forecast for the country’s corn crop by 399,000 MT, to a record 116.712 million MT. Tomorrow’s weekly USDA export sales report, delayed by today’s Veterans Day holiday, is expected to show net U.S. corn sales of 700,000 MT to 1.4 MMT, based on a Reuters survey of analysts. Last week, USDA reported net sales of 1.224 MMT for the week ended Oct. 28, up 37% from the previous week and up 10% from average for the previous four weeks.

Soybeans: January soybean futures rose 4 3/4 cents to $12.21 1/2, the highest closing price since Nov. 4. Soymeal futures ended mostly $1.10 to $2.50 higher, while soyoil finished steady to 40 points lower. Soybeans were supported by corrective buying and short covering, as well as long corn/short soybean spread unwinding. Prices remain below the Nov. 9 post-USDA report high, despite the unexpected cut to the U.S. soybean harvest, with focus shifting toward a mostly favorable start to the South America growing season. Brazil raised its official soybean crop estimate by nearly 1.3 MMT from last month to a record 142 MMT. Conab, Brazil’s crop estimating agency, expects planted acreage to be 300,000 acres higher than previously forecast. Tomorrow’s USDA export sales report is expected to show net U.S. soybean sales of 950,000 MT to 1.8 MMT. Last week, USDA reported net sales of 1.864 MMT for the week ended Oct. 28, up 58% from the previous week and up 19% from the four-week average.

Wheat: December SRW wheat rose 9 1/2 cents to $8.12 1/2, the highest closing price for a nearby contract since December 2012. December HRW wheat surged 10 1/2 cents to $8.28, the highest settlement for a nearby contract since May 2014. December spring wheat rose 7 cents to $10.53 1/4, near a 10-year high reached earlier this month. Wheat futures extended this week’s rally to multi-year highs amid escalating concern over shrinking global supplies. Earlier today, European wheat futures in Paris hit 14-year highs on speculation that potential Russian export restrictions may increase international demand for already-tight European Union supplies. The Russia news compounded USDA’s larger-than-expected cut to its global supply forecast earlier this week and persistent U.S. Plains dryness hampering the HRW crop. Tomorrow’s USDA weekly export sales report is expected to show net U.S. wheat sales of 200,000 to 500,000 MT. In last week’s report, USDA reported net sales of 400,100 MT for the week ended Oct. 28, up 49% from the previous week and up 4% from the four-week average.

Cotton: December cotton futures fell 14 points to 118.54 cents a pound, while deferred contracts mostly rose. Cotton futures were pressured by concern a stronger dollar will crimp export demand, as the U.S. dollar index today climbed to its highest level since July 2020. Cotton prices remain underpinned by a broader, inflation-driven commodity bull market, fueled earlier this week by the Labor Department’s report that U.S. consumer prices in October posted the highest year-over-year increase in 31 years. Traders await USDA's weekly export sales report tomorrow. Last week, USDA reported net U.S. cotton sales of 139,100 running bales (RB) during the week ended Oct. 28, down 61% from the previous week and down 51% from the average for the previous four weeks.

Cattle: December live cattle fell 12.5 cents to $131.875, extending this week’s sideways trade. November feeder cattle rose 67.5 cents to $157.325. Continued weakness in the wholesale beef market burdened cattle futures, indicating record retail beef prices are curbing consumer demand. That’s offsetting bullish impact from the cash cattle market’s ongoing strength. U.S. consumers have several options at the supermarket meat case, and the market may be anticipating substitution demand for other meats, such as pork and poultry. Earlier today, USDA reported Choice grade cutout values fell $1.29 to an average of $284.23, the fifth consecutive daily decline. Movement at midday was 70 loads. Initial cash cattle prices this week rose $3 to $4 over last week’s levels, with packer demand in some areas stronger than available market-ready supplies. Live steers in five top feedlot areas averaged $131.25 yesterday, compared to last’s week’s average of $129.23.

Hogs: December lean hog futures fell 32.5 cents to $75.375, after rising as high as $76.275 earlier in the session. Stronger wholesale pork quotes supported hog futures initially before the market faded late. The hog and pork complex remains vulnerable to seasonal pressure, since demand for most pork cuts is weak at this time of year, while hog supplies and weekly slaughter will likely soon climb toward annual highs in mid-December. The preliminary quote for the next CME Lean Hog index fell 78 cents to $77.94, the lowest since February. The ham market historically gains strength at this time of year, which was reflected in today’s midday pork quotes, as primal ham values jumped $32.25 to $101.72, boosting pork cutout $6.56 to $95.30.

 

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