After the Bell | November 18, 2021

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Corn: December corn dropped 2 1/4 cents to $5.73. Corn futures were unable to sustain overnight gains, largely because soybean and wheat markets faded. Funds were sellers on the day, though they weren’t active on the short side. USDA today reported net U.S. corn export sales totaling 904,600 MT for the week ended Nov. 11, down 15% from the previous week and down 19% from the average for the previous four weeks. Canada was the leading buyer. Exports of 1.168 MMT were up 46% from the four-week average and also a marketing-year high. Total corn export commitments for 2021-22 are running 6% behind year-ago, though 47% ahead of the five-year average. Corn basis remains firm at interior locations, reflecting a pickup in exporter demand. Basis from ethanol plants is also firm as production remains high. Limited farmer sales at current price levels have exporters and processors competing for supplies to source near-term needs.

Soybeans: January soybeans fell 11 3/4 cents to $12.65 1/4, down from yesterday’s seven-week high. January soybean meal fell $5.00 to $363.60 per ton. January soybean oil rose 20 points to 59.18 cents. Soybeans and soymeal futures fell under profit-taking pressure in the wake of breakout rallies over the past week. Continued favorable growing weather in South American soybean regions is longer-term bearish factor for the soybean complex, with Brazil projected to harvest a record soybean crop in 2022. USDA early today reported net weekly U.S. soybean sales totaling 1.383 MMT, up 13% from the previous week but down 20% from the average for the previous four weeks. China was a lead buyer at 727,500 MT. Today’s weekly export sales report follows USDA’s daily sales announcements over the previous four trading days of soybean sales totaling 814,000 MT--for China and “unknown destinations.”

Wheat: March SRW wheat fell 2 1/4 cents to $8.20 after reaching a contract high earlier today at $8.54. March HRW wheat fell 6 cents to $8.30 1/2, down from a contract high earlier at $8.53 1/4. March spring wheat futures fell 10 3/4 cents to $10.19 3/4. Winter wheat futures saw an early climb to multi-year highs, but profit-taking developed late. Prices surged earlier on signs of improved U.S. exports and ongoing concern over tightening global supplies. USDA reported net weekly U.S. wheat sales at 399,100 MMT, up 40% from the previous week and up 21% from the average for the previous four weeks. Expectations ranged from 250,000 to 500,000 MT. Wheat exports of 310,900 MT were up 15% from the previous week and up 65% from the four-week average. Earlier today, the International Grains Council (IGC) cut its forecast for 2021-22 global wheat production by 0.5%, partly on a diminished outlook for Iran’s crop. In the U.S., there’s little relief ahead for dryness-stressed winter wheat in the U.S. Plains.

Cotton: December cotton futures fell 211 points to 117.59 cents per pound, while March futures fell 178 points to 115.14 cents. Cotton futures fell sharply after USDA’s weekly export sales report showed weaker buying from China and a general downtick in demand. Net U.S. cotton sales for the week ended Nov. 11 totaled 136,700 running bales (RB) for 2021-22, up 7% from the previous week but down 46% from the average for the previous four weeks. Top buyers included Vietnam (40,400 RB), Turkey (30,800 RB) China (13,500 RB) and Nicaragua (13,200 RB). By contrast, China bought 78,800 RB during the week ended Nov. 4. Exports of 77,900 RB were down 11% from the previous week and 24% below the prior four-week average. Weakness in crude oil prices also burdened cotton futures.

Cattle: February live cattle rose 85 cents to $137.25, the highest close in 2 1/2 months. January feeder cattle rose $2.45 to $161.375, a four-week high. Cash cattle strength supported futures, as meatpackers continued to bid aggressively for supplies. Market-ready fed cattle numbers are tight with feedlots current. Packers are reportedly bidding $133.00 in the south and the north. Reports said feedlots in the south have sold at $133.00, while many in the north are passing. A $134.00 bid was reported in Texas. Dressed beef prices are quoted at $210.00. Late today, USDA reported live steers in five top feedlot regions at an average of $131.93, up from last week’s average of $131.47. Choice cutout values fell $2.31 to $276.16, the lowest since $275.22 on July 29. Select grade fell 90 cents to$263.16 and overall movement totaled 193 loads. Also today, USDA reported net U.S. weekly beef sales totaled 25,500 MT, up 23% from the previous week and up 58% from the four-week average. China was the prominent buyer at 13,800 MT.

USDA’s Cattle on Feed Report tomorrow is expected to show feedlot placements in October rose 2.2% from year-ago, based on a Reuters survey of analysts. The number of cattle on feed as of Nov. 1 is expected to decline about 0.2%. We think the supply of market-ready cattle will continue to tighten in the coming weeks, which suggests cattle prices could post a strong seasonal rise into spring. Cattle slaughter typically declines during that period.

Hogs: December lean hog futures fell $1.075 to $75.10, while February futures rose 15 cents to $83.30, the fourth gain in the past five days. The prospect of diminished supplies supported deferred hog futures. After seeming to stabilize earlier this week, cash hog prices turned lower again today. The preliminary quote for the next CME Lean Hog Index is down $1.02 to $75.26, the lowest since Feb. 12. Given the swine industry’s history of boosting hog slaughter and pork production to annual highs in early-to-mid-December, the current pessimism seems well justified, although USDA’s implicit prediction of annual slaughter reductions of as much as 6.0% during December-February suggests the market could post a fall low this year, rather than the early-winter bottoms between Christmas and New Year’s Day often seen in recent years. Pork cutout values jumped $5.17 today to an average of $89.69, propelled by a surge of $22.51 in primal ham. Carcass values on national direct markets fell $1.20 to $55.10.


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