After the Bell | November 12, 2021

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Corn: December corn futures rose 7 3/4 cents to $5.77 1/4, up 4.4% for the week and near a four-month closing high of $5.79 on Nov. 1. Nearby futures posted gains in three of the past four weeks. Rallies in soybeans and wheat overshadowed a higher-than-expected USDA corn crop estimate earlier this week. A technically strong close and stepped-up buying from speculative funds may spur further corn futures gains next week, though exports continue to lag last year’s pace. During the week ended Nov. 4, net U.S. corn export sales totaled 1.067 MMT, down 13% from the previous week and down 4% from the average for the previous four weeks, USDA reported today. USDA’s next Crop Progress report Nov. 15 will likely show the corn harvest near completion. The crop was 84% harvested as of Nov. 7. Harvest pressure is winding down and market focus is shifting toward exports and South American weather, which has been mostly favorable for early corn and soybean development.

Soybeans: January soybean futures climbed 22 3/4 cents to $12.44 1/4, up 38 3/4 cents, or 3.2%, for the week. December soymeal surged $17.60 to $362.10, up $29.40 for the week and the highest closing price since mid-August. December soyoil fell 17 points to 58.97 cents per pound, up 19 points for the week. January soybeans appear close to breaking out of a downtrend in place since summer but will likely require stronger exports to sustain gains. Earlier today, USDA said net soybean sales for the week ended Nov. 4 totaled 1.289 MMT, down 31% from the previous week and down 25% from the four-week average. USDA also reported a daily soybean sale of 256,930 MT to unknown destinations. Focus is increasingly shifting toward South American weather and crop development as the U.S. harvest wraps up. Earlier this week, Brazil raised its official soybean crop estimate by nearly 1.3 MMT from last month to a record 142 MMT. The surging U.S. dollar is emerging as another potential bearish factor, with the U.S. dollar index reaching the highest levels since July 2020.

Wheat: December SRW futures rose 4 1/2 cents to $8.17, up 50 1/2 cents for the week and the highest closing price for a nearby contract since December 2012. December HRW futures gained 5 cents to $8.33, up 54 1/4 cents for the week. December spring wheat fell 3 1/2 cents to $10.50, up 40 1/2 cents for the week. Wheat futures extended a rally on escalating concern over shrinking global stockpiles. However, U.S. wheat export sales remain tepid. USDA reported net weekly wheat sales of 285,900 MT, down 29% both from the previous week and from the prior four-week average. U.S. wheat sales likely need to improve to support the elevated futures prices. Dryness in the U.S. Plains continues to stress HRW wheat acreage, putting USDA’s next weekly crop condition ratings Nov. 15 squarely in market focus. UDSA rated 45% of the U.S. crop “good” or “excellent” as of Nov. 7. While that was unchanged from the previous week, acres rated “poor” or “very poor” rose 1 percentage point to 22%.

Cotton: December cotton futures fell 85 points to 117.69 cents, up 82 points for the week. The cotton market traded sideways this week, a typical “pause” phase in during a strong price uptrend. However, buying interest next week may be squelched by uninspiring weekly USDA export sales for U.S. cotton this week. USDA today reported net U.S. cotton sales of 128,000 running bales (RB) for 2021-22, down 8% from the previous week and down 51% from the prior four-week average. Exports of 87,900 RB were down 38% from the previous week and down 16% from the prior four-week average. Longer-term, elevated inflation concerns remain a bullish force in cotton. Earlier this week, the Labor Department reported U.S. consumer prices in October posted the highest year-over-year increase in 31 years.

Cattle: December live cattle edged up 25 cents to $132.125, up 42.5 cents for the week. January feeder cattle futures fell $1.075 to $156.25, down $3.35 for the week amid pressure from rising corn prices. Futures' muted response to the cash market's climb near four-year highs suggests traders anticipate a short-term setback in cash values heading into the holidays. Further pressure stemmed from slumping wholesale beef, an indication record retail prices are hurting consumer demand. Choice cutout values fell 84 cents today to $284.30, down 1.8% from $289.54 at the end of last week and the lowest since late October. While historical patterns portend further declines over the next few weeks, cattle prices should find support from tighter supplies of market-ready animals and strong exports. Live steers averaged $131.35 today, up from last week's average of $129.23. Cattle slaughter this week totaled 655,000 head, up 0.8% from last week but down 0.3% from the same week in 2020.

Hogs: December lean hog futures rose 50 cents Friday to $75.875, down 0.8% from $76.55 at the end of last week. Cash fundamentals continued to sag, with the latest CME lean hog index down 77 cents to $77.95. The index has fallen 17% since the beginning of October and is the lowest since $77.74 on Feb. 19. Pork carcass cutout values fell $1.09 today to an average of $94.71, down 1.7% for the week but up from a nine-month low Nov. 10. Still, futures action so far this month suggests the market may have established a near-term bottom. Meatpackers this week slaughtered an estimated 2.614 million head, up 0.4% from the previous week but down 2.5% from the same week in 2020. Year-to-date, slaughter is running 2.0% under 2020 levels.

 

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