After the Bell | November 19, 2021
Corn: December corn futures fell 2 1/4 cents to $5.70 3/4, down 1.1% from $5.77 1/4 at the end of last week and the lowest closing price since Nov. 11. Futures amid corrective selling following a climb to two-week highs earlier in the week. The U.S. harvest is largely complete and traders are looking to exports and other markets for near-term direction. Strong demand from domestic ethanol producers and signs of a pick-up in exports should support futures next week, but the market will need to see fresh overseas business to remain at elevated prices or extend a five-week rally. USDA’s weekly Crop Progress report Nov. 22 will likely show the corn harvest close to finished. As of Nov. 14, the crop was 91% harvested. Key market factors in coming weeks includes South America’s weather, which so far has been mostly favorable for early-season corn and soybean crop development in Argentina and Brazil. U.S. markets are closed Nov.25 for the Thanksgiving Day holiday.
Soybeans: January soybean futures fell 2 cents to $12.63 1/4 per bushel, still up 1.5% from $12.44 1/4 at the end of last week and the second straight weekly gain. January soymeal rose $1.00 to $364.60 per ton. January soyoil futures fell 112 points to 58.06 cents per pound. Concerns about a lysine shortage continued to lift soymeal, which supported soybeans while undercutting soyoil as crush spreads adjusted. This week’s soybean futures surge, driven in part by signs of increased demand from China, broke a downtrend in place since late spring. Chinese buyers may step up purchases if they’re convinced the market has bottomed. Export demand and meal use will influence price direction in the month ahead. Chinese buying, as is often the case, could prove pivotal to the short-term outlook. Early winter is a prime window for sales to China, since Brazil’s harvest won’t start for some time.
Wheat: March soft red winter wheat futures rose 3 1/2 cents to $8.34 1/4, up 5 3/4 cents on the week. March HRW wheat rose 8 cents to $8.38 1/2, up 3 cents this week. March spring wheat futures fell 5 1/4 cents to $10.14 1/2, down 32 1/4 cents for the week. SRW and HRW futures hit multi-year highs this week amid ongoing concern over tightening global supplies. Large speculators are close to even in SRW futures and options and have room to build long positions, which could see SRW futures assume upside leadership. In the weeks ahead, traders will focus on weather conditions in major wheat-producing countries, and the main trouble spots are in the U.S. The Northern Plains remain dry and the wheat crop there is not well established. HRW areas of the Southern Plains have elevated odds of above-normal temperatures and below-normal precipitation from December through February, according to the National Weather Service’s latest 90-day outlook.
Cotton: March cotton futures rose 129 points to 116.43 cents, up 1.2% on the week. Cotton futures finished the week strong, despite sharp declines in Nymex crude oil and further strength in the U.S. dollar index, which neared a 16-month high. Record highs in U.S. stock indexes this week were supportive to cotton, indicating U.S. consumers will be in a buying mood during the holidays, while soaring inflation has prompted cotton end-users to stock up more to beat expected future price increases. However, rising Covid-19 cases in Asia, Europe and even parts of the U.S. are a worrisome element that could crimp businesses and consumer demand, if businesses are forced to lock down again. Austria and parts of Germany and China have been forced to lock down their businesses just recently. Additionally, high cotton prices appear to be pinching export demand for U.S. cotton. USDA’s weekly export sales report yesterday showed weaker buying from China and a general decline in demand for the U.S. fiber.
Cattle: February live cattle rose 45 cents to $137.70, up 1.2% for the week and the highest closing price since Sept. 1. December live cattle ended at $133.50, the highest settlement for a nearby contract since April 2017. January feeder cattle fell 45 cents to $160.925. Cash cattle markets this week extended recent strength, with live steer prices today slightly over $133.00, up nearly $2.00 from last week. Lofty cash prices likely will be difficult to sustain next week, since the packing industry will be operating a on a reduced schedule around the Thanksgiving holiday, though wholesale beef prices’ rebound today may indicate demand for beef has improved from apparently weak early-to-mid-autumn levels. Choice cutout values today rose $2.25 to $278.41, down 2.1% from $284.30 at the end of last week but up from a 3 1/2-month low the day before, USDA figures showed. Meatpackers slaughtered an estimated 677,000 head of cattle this week, up 3.4% from last week and up 1.7% from the same week in 2020. Slaughter so far this year is running 3.0% under last year’s levels.
Late today, USDA’s Cattle on Feed report showed 2.245 million head of cattle were placed in U.S. feedlots during October, up 2.4% from the same month in 2020. Placements were slightly higher than trade expectations for an increase of about 2.2%. The number of cattle on feed as of Nov. 1 totaled 11.95 million head, down 0.2% from 11.97 million head a year earlier and matching expectations.
Hogs: February lean hogs fell 82.5 cents to $82.475, up 2.4% from $80.55 at the end of last week and the fourth consecutive weekly gain. Hog futures pushed to six-week highs earlier today but saw little sustained buying interest as cash fundamentals remained soft. Still, futures extended a rally from late October amid beliefs prices have established a near-term bottom and the cash market has established an autumn low, earlier than the typical early-winter troughs in late December. Stabilization in the CME lean hog index could add further support to futures next week. Today’s index fell $1.02 to $75.26, the lowest since Feb. 12. Wholesale pork extended a slump this week, but movement was generally strong, indicating good demand at lower prices. Pork cutout values rose 13 cents today to an average of $89.82, down from $94.71 at the end of last week. Movement totaled 237 loads. Carcass values on national direct markets averaged $54.95, down from $58.00 at the end of last week.
Meatpackers this week slaughtered an estimated 2.635 million head, up 0.8 % from the previous week but down 3.4% from the same week in 2020. Year-to-date, slaughter is running 2.1% under 2020 levels.