After the Bell | November 16, 2021

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Corn: December corn futures declined 6 1/4 cents to $5.71, pressured by profit-taking in the wake of the recent rally and spillover weakness from double-digit declines in the wheat markets. Dollar strength is also emerging as a bearish factor in the grain markets. The U.S. dollar index surged to a 16-month high after U.S. retail sales for October came out stronger than expected. The market had little response to USDA’s report early today of a daily corn sale of 270,000 MT to Mexico for delivery during the 2021-22 marketing year. Other bearish factors included a Russian consultant SovEcon raising its Ukrainian corn crop estimate by 1.5 MMT to a record 39.9 MMT. China recently booked Ukrainian corn, according to export sources. Late yesterday, USDA reported the U.S. corn crop was 91% harvested as of Nov. 14, up from 84% a week earlier and above the 86% average for that date for the previous five years. Harvest progress matched trade expectations.

Soybeans: January soybean futures fell 6 cents to $12.51 1/4, after reaching a three-week high earlier today. December soybean meal fell $4.20 to $367.50 per ton, while December soybean oil gained 97 points to 59.17 cents per pound. Soybean futures fell under modest profit-taking following the past week’s gains, though declines were limited by fresh export business and winding down of harvest pressure. Early today, USDA reported a daily soybean sale of 161,000 MT for delivery to “unknown destinations” for the 2021-22 marketing year. Today’s sale announcement followed a daily sale yesterday of 264,000 MT, also for unknown destinations. Soymeal futures fell after three straight days of gains, pressured by unwinding of spreads against soyoil. The outlook for South America’s soybean crop remained favorable. Late yesterday, USDA said the U.S. soybean crop was 92% harvested as of Nov. 14, up from 87% a week earlier and just under the five-year average of 93%.

Wheat: March SRW wheat futures fell 16 3/4 cents to $8.20. March HRW wheat fell 15 3/4 cents to $8.22 3/4. March spring wheat fell 13 1/4 cents to $10.17. Winter wheat futures fell in a corrective profit-taking pullback following multi-year highs posted yesterday, along with pressure from the surging U.S. dollar. The tighter global supply outlook and dryness in the U.S. Plains continued to underpin the market. Late yesterday, USDA’s crop condition ratings indicated slight improvement in winter wheat acreage. As of Nov. 14, the crop was rated 46% “good” or “excellent” condition, up from 45% a week earlier, while acreage rated “poor” or “very poor” fell to 20% from 22%. For other major global wheat growers, including in Australia, China and India, weather appears generally favorable for crop development.

Cotton: December cotton futures rose 36 points to 117.98 cents and March futures rose 49 points to 115.13 cents. Cotton futures sustained a firm tone despite a sell-off in grain futures and dollar strength. A stronger than expected 1.7% increase in U.S. retail sales in October was also supportive for cotton futures, though recent U.S. export weakness and an accelerating U.S. harvest limited upside. USDA late yesterday reported 65% of the U.S. cotton crop was harvested as of Nov. 14, up from 55% a week earlier and up from the five-year average of 64% for that date. Good harvest weather is expected in West Texas over the next 10 days, while crops in the U.S. Delta face periodic precipitation that may lead to lower fiber quality. Southeastern U.S. cotton harvest progress should advance better in the next 10 days due to less frequent and less significant rain.

Cattle: December live cattle futures fell 5 cents to $131.725, while February futures, now the most-active contract, fell 22.5 cents to $136.10. January feeder cattle climbed 80 cents to $159.275 per hundredweight. Live cattle futures ended narrowly mixed, extending the sideways trade of the past two weeks amid expectations the cash market’s recent upward momentum will slow after two weeks of aggressive packer buying. Cash cattle have yet to establish a firm direction this week, though limited supplies of market-ready animals signals higher prices in 2022, based upon the February contract’s $4.00-plus premium to December. Last week, live steers rose $2.24 to an average of $131.47, the sixth consecutive weekly gain and the highest weekly average since early June 2017. Wholesale beef prices remain under pressure, an indication record retail prices are curtailing demand. Choice cutout values fell $1.07 today to an average of $282.13, the lowest since $281.82 on Oct. 22.

Hogs: December lean hog futures jumped $1.90 to $77.725, the highest closing price since $77.875 on Nov. 4. Hog futures climbed near a two-week high as technically-driven buying combined with an outlook for tighter supplies and possible signs of a bottom in the CME Lean Hog index, which rose 16 cents to $76.33. Futures upside may be short-lived after pork cutout values plunged $6.16 today to $87.77, as a $12.00 drop in bellies helped send the average to the lowest daily price since Feb. 10. Carcass values on national direct markets fell 30 cents to $57.16. The industry probably can’t rely on the ham market’s typical seasonal gains into mid-December, when grocers will finish their buying for Christmas dinner entrees, but intermittent bursts of ham price strength followed by significant setbacks seem likely.


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