After the Bell | November 2, 2021
Corn: December corn fell 6 cents to $5.73, after rising earlier in the day to $5.86, the highest intraday price since $5.94 1/4, the August high. Corn futures endured a round of corrective selling today after earlier extending the strong price recovery from the October low. As wheat futures faded from early multiyear highs, corn followed amid profit-taking pressure. There was no fundamental news behind price drop. In fact, the limited news that was out there today leaned mildly friendly – a sign that the pullback was technical and corrective in nature. Tomorrow’s EIA weekly ethanol production report may reflect a record high weekly output, light of strong production margins at an estimated 45 to 90 cents across the Corn Belt. USDA reported yesterday that ethanol production in September declined 1.6% from August, but it should rise sharply in October.
Soybeans: January soybeans rose 7 3/4 cents to $12.56 1/4. December soybean meal rose $8.10 to $337.20 per ton, the contract’s highest closing price since $341.30 on Sept. 29. December soyoil fell 2 points to 61.99 cents a pound. Soybean futures rose modestly as USDA showed harvest progress slightly behind trade expectations. Also, soymeal futures surged to a five-week high reflecting technical strength and unwinding of soyoil-soymeal spreads. Late yesterday, USDA reported the U.S. soybean crop was 79% harvested as of Oct 31, up from 73% a week earlier and slightly behind the average of 81% for the previous five years. Progress fell short of trade expectations for harvest to be 81% finished. Expectations for a bountiful harvest limited price upside as the market looked toward USDA’s next Crop Production report Nov. 9. Commodity broker StoneX today increased its soybean crop estimate by 54 million bu. to 4.49 billion bu. on an average yield of 51.9 bu. per acre, up 0.6 bu. from last month. USDA currently projects an average yield of 51.5 bu. per acre and production of 4.449 billion bu.
Wheat: December SRW futures fell 5 3/4 cents to $7.91 1/2, after earlier reaching $8.07, a contract high for the second day and the highest intraday price for a nearby contract since December 2012. December HRW fell 8 1/4 cents to $7.98 1/4, after earlier hitting $8.14 1/2, the highest since May 2014. December spring wheat ended unchanged at $10.75 1/2, after reaching a contract high at $10.86 1/2. Winter wheat futures led a profit-taking setback across the wheat markets after prices extended rallies to multiyear highs earlier in the day. Shrinking global supplies and strong demand continued to underpin the market, while further deterioration in the U.S. winter wheat crop also supported prices. Late yesterday, USDA said it rated 45% of the winter wheat crop “good” or “excellent,” down from 46% a week ago and primarily a reflection of a suboptimal performance so far in HRW states.
Cotton: December cotton fell 259 points to 117.25 cents, while March futures fell 120 points to 113.83 cents. Prices closed nearer the session lows today after hitting contract and 10-year highs early. Profit-taking and corrective selling pressured cotton and other futures markets, following recent rallies to multi-year highs. Some cotton traders closed out of long-December futures positions and shifted into the March contract, just ahead of when index funds typically make the same “roll.” A higher U.S. dollar index and weaker Nymex crude oil futures were mildly bearish outside market forces. USDA yesterday reported the U.S. cotton harvest at 45% complete as of Oct. 31, up from 35% a week earlier but slightly behind the 48% average for the previous five years. The crop was rated 62% in “good” or “excellent” condition, down from 64% a week earlier.
Cattle: December live cattle rose $1.10 to $129.95 and nearer the session high. November feeder cattle rose $3.175 to $157.575. Feeder futures led live cattle higher, spurred by weakness in corn futures. If the corn market resumes its rally, upside in feeders will likely be limited. Ideas the cash cattle market has bottomed out and will trend seasonally higher into the end of the year also supported buying interest in futures. Choice beef cutout values rose $1.86 to $287.58, near a four-week high. Movement was light at 82 loads. Cash cattle trade has not been established so far this week, but we expected steady-firmer prices compared with last week. Live steers in top feedlot areas averaged $126.29 last week, up from $124.39 from the previous week and the fourth consecutive weekly gain.
Hogs: December futures dropped $1.90 to $74.25, the lowest closing price since $71.975 on Oct. 27, while February hogs fell $1.65 to $77.15. Hog futures extended yesterday’s weakness on poor technicals and lackluster cash fundamentals. Despite the industry’s tendency for diminished hog slaughter and pork supplies this time of year, cash and wholesale markets remain under pressure. Pork cutout values rose $1.77 today to $94.21 but remain near eight-month lows. The preliminary CME lean hog index declined 55 cents to $78.61, the lowest since late February but still over $4.00 above nearby futures. On national direct markets, carcasses fell 5 cents to $60.98. Meatpackers slaughtered 951,000 head of hogs so far this week, down 0.7% from the same period last week and down 3.3% from the same period a year ago, USDA reported.
