After the Bell | November 15, 2021

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Corn: December corn futures dropped 3/4 cent to $5.76 1/2. Corn failed to gain sustained spillover support from strong gains in the soybean and soymeal markets and lesser gains in winter wheat, largely because of heavy selling in spring wheat market. Given some of the big price moves in the other markets, corn was relatively quiet to start the week, suggesting funds may not be interested in greatly altering their positions at the moment. Weekly corn export inspections were stronger than anticipated at 33.7 million bu. for the week ending Nov. 11, though that was a relatively normal seasonal tally and right in line with year-ago. So far in 2021-22, corn inspections are running 20.6% behind year-ago, whereas USDA projects a 9.2% decline. Late today, USDA reported the corn crop was 91% harvested as of yesterday, up from 84% a week earlier and above the 86% average for that date for the previous five years.

Soybeans: January soybeans rose 13 cents to $12.57 1/4, the highest closing price since $12.65 1/2 on Sept. 30. March soybean meal rose $10.40 to $363.60, a four-month closing high. March soyoil fell 82 points to 57.78 cents, the lowest settlement since late September. Soybean meal futures were in the spotlight to start the week, aggressively extending recent corrective gains amid talk of potential lysine shortages in the U.S. A shortage, if it emerges, would drive up soymeal use in livestock feed rations. There was also unconfirmed talk China may shut off lysine exports. Meal was also supported by active long soyoil/short meal spread unwinding. USDA this morning reported a daily U.S. soybean sale of 264,000 MT for delivery to “unknown destinations” for delivery during the 2021-22 marketing year. Today’s NOPA crush report showed 184.0 million bu. of soybeans crushed in October, up 30.2 million bu. from September and implying the full crush for October was 194.0 million bu., which would be the third-largest monthly total on record. USDA today said the soybean crop was 92% harvested as of yesterday, up from 87% a week earlier and just under the five-year average of 93%.

Wheat: December SRW wheat futures rose 9 1/4 cents to $8.26 1/4, the sixth consecutive daily gain and the highest settlement for a nearby contract since December 2012. December HRW futures rose 3 cents to $8.36, the highest closing price for a nearby contract since May 2014. December spring wheat fell dropped 23 1/2 cents to $10.26 1/2. Winter wheat futures extended a month-long rally on shrinking global supplies and signs of a pick-up in export demand. USDA earlier today reported wheat inspected for export during the week ended Nov. 11 at 388,743 MMT (14.3 million bu.), up from 251,452 MT the previous week and above trade expectations ranging from 150,000 to 375,000 MT. Persistent dryness in prime HRW growing areas of the U.S. Plains also supported winter wheat futures. USDA’s latest weekly crop condition ratings continued to reflect stress on the winter wheat crop from lack of moisture. The winter wheat crop was in 46% in “good” or “excellent” condition at the start of this week, up from 45% a week earlier and slightly above trade expectations.

Cotton: December cotton futures fell 7 points to 117.62 cents per pound, the lowest closing price since Nov. 8. Cotton futures extended the past week’s sideways-to-lower trade amid pressure from continued dollar strength, weaker exports and an accelerating U.S. harvest. The U.S. dollar index today reached the highest level since July 2020. Prospects for continued strong demand from China may limit futures declines. USDA later today is expected to report another jump in cotton harvest progress, and weather in top U.S. cotton regions is expected to remain mostly favorable for fieldwork. The crop was 65% harvested as of yesterday, up from 55% the previous week and ahead of the five-year average of 64%, USDA said today.

Cattle: December live cattle dropped 35 cents to $131.775, while January feeder cattle rose 75 cents to $158.475. Price action was quiet in the live cattle market, signaling traders sense the cash market may be ready to pause after an extended upturn and two very active weeks of purchases by packers. Last week’s average cash price came in at $131.47, up for the sixth consecutive week and the highest weekly average since early June 2017. After falling behind on marketings, feedlots have essentially gotten current the past two weeks. While that may slow packer interest this week, it is a positive sign for cash trade in the weeks ahead. The wholesale beef market has hit a soft patch, with Choice cutout values down $1.10 today to an average of $283.20, the lowest since $283.04 on Oct. 25. A decline in rib prices has led the recent pullback in the cutout, signaling demand for year-end prime rib features has likely stalled. That could lead to additional near-term declines in wholesale beef prices.

Hogs: December lean hog futures fell 7.5 cents to $75.80, while February hogs rose 62.5 cents to $81.175, a four-week closing high. Weak cash fundamentals pressured nearby hog futures, while speculative buying and prospects for stronger export demand next year supported deferreds. Pork carcass cutout values fell 78 cents today to an average of $93.93, after surging earlier behind strength in hams. Movement was decent at about 312 loads. Today’s national direct cash carcass price fell 54 cents to $57.46. The CME lean hog index was down $1.27 today to $76.68, the lowest level since February. Today’s hog slaughter was estimated at 486,000, compared to 467,000 last Monday and 480,000 one year ago at this time.

 

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