After the Bell | November 22, 2021

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Corn: December corn futures rose 6 cents to $5.76 3/4, while March futures, now the most-active contract, rose 7 1/4 cents to $5.84 1/4. Corn futures were supported by the surge in the wheat market today. That allowed corn to work higher despite the U.S. dollar index reaching another 16-month high and disappointing export numbers. USDA reported corn export inspections totaling 618,490 MT, or 24.3 million bu., for the week ending Nov. 18, down 29% from the previous week and lower than normal for this time of year. Inspections so far in the 2021-22 marketing year are running 18.2% behind year-ago. USDA projects exports will decline 9.2% from 2020-21. Demand from the domestic ethanol industry remains strong, with firm basis levels signaling producers actively seeking supplies to maintain their recent pace. Given strong margins, plants would be producing more ethanol if they could source more bushels. Late today, USDA reported the U.S. corn harvest at 95% complete as of yesterday, up from 91% a week earlier and slightly under trade expectations for 96%.

Soybeans: January soybeans rose 11 cents to $12.74 1/4, near the session high. January soybean meal fell 90 cents to $363.70, near the session low. January soyoil rose 129 points to 59.35 cents. Soybeans started the week on a firm note with spillover support from wheat and strength in the soymeal market amid concern over a shortage of the livestock feed additive lysine. USDA reported 1.684 MMT (61.9 million bu.) of soybeans inspected for export during the week ended Nov. 18, down from 2.362 MMT (86.8 million bu.) the previous week. Export inspections for U.S. soybeans have been on a downward-trending seasonal slope until May. Weather conditions in South American soybean regions remain mostly favorable for crop development, limiting buying interest in soybean futures. USDA said 95% of the U.S. soybean crop was harvested as of yesterday, up from 92% a week earlier and slightly under trade expectations for 96%.

Wheat: March SRW futures surged 23 1/4 cents to $8.57 1/2, after posting a contract high at $8.59 1/2. March HRW futures jumped 28 cents to $8.66 1/2, after reaching a contract high at $8.70 1/4. December contracts for HRW and SRW each closed at nine-year highs for nearby contracts. March spring wheat rose 17 1/4 cents to $10.31 3/4. Winter wheat futures extended last week’s rally amid a shrinking global supply outlook, with heavy rains in Australia stirring concern over potential crop damage. In the U.S., U.S. Plains dryness is stressing the HRW crop ahead of winter dormancy. Little precipitation is expected this week, and “soil moisture will likely continue to be very short from the Texas Panhandle through eastern Colorado and western Kansas,” World Weather Inc. said. USDA late today reported the winter wheat crop condition at 44% “good” or “excellent” as of yesterday, down from 46% the previous week. Analysts expected the good-to-excellent rating to hold at 46%. Also today, USDA reported 177,799 MT (6.5 million bu.) of wheat inspected for export during the week ended Nov. 18, down from 390,708 MT (14.4 million bu.) the previous week and short of trade expectations.

Cotton: December cotton futures fell 151 points to 117.71 cents per pound, while March cotton fell 46 points to 115.97 cents. The December contract begins delivery tomorrow. Cotton futures were pressured by continued strength in the U.S. dollar, which reached its strong point against the euro since July 2012. The U.S. dollar index also hit its highest mark since July 2020, as the nomination of Federal Reserve Chair Jerome Powell for a second four-year term by President Joe Biden suggests a less-dovish policy outlook. Dollar strength makes dollar-denominated commodities more expensive for foreign buyers. Higher cotton prices appear to be crimping demand for U.S. cotton. USDA’s weekly export sales report last week showed weaker buying from China and a general decline in demand for the U.S. fiber. Export demand for U.S. cotton must remain strong to keep prices at elevated levels. USDA said 75% of the U.S. cotton crop harvest was harvested as of yesterday, up from 65% a week earlier and four percentage points ahead of the five-year average for that date.

Cattle: December cattle rose 90 cents to $134.425, the highest closing price for a nearby contract since April 2017. February live cattle rose $1.275 to $138.975, the contract’s highest closing price since $139.00 on Aug. 26. January feeder cattle rose 77.5 cents to $161.70. Live cattle gained on recent cash market strength and followthrough buying from last week’s strong price performance. Last Friday’s USDA Cattle on Feed report was price-neutral. Live steers in five top feedlot regions last week averaged $133.11, up 1.2% from the previous week for the seventh straight weekly gain and a 4 1/2-year high. It's unclear whether packers will be as aggressive with cash bids this week after actively buying the past three weeks. Choice cutout values rose 84 cents today to $279.25 on movement of 124 loads. The market’s drop under $280.00 late last week appeared to stir retailer buying, similar to previous price action earlier this year.

Hogs: December lean hog futures rose 90 cents to $74.65 and February lean hogs rose 55 cents to $83.025 today. Hog futures started strong in the holiday-shortened week. December lean hogs are now trading above cash hog index, which tomorrow is projected to drop 58 cents to $72.88, the lowest since Feb. 10. But there’s growing trade confidence the index is near a short-term low. Pork carcass cutout values today fell $3.57 to an average of $86.25, again erasing a morning gain as primal hams dropped over $10.00. Movement was strong at nearly 385 loads. The national direct average carcass price fell 4 cents to $54.91. Meatpackers last week slaughtered an estimated 2.635 million head of hogs, up 0.8 % from the previous week but down 3.4% from the same week in 2020. Year-to-date, hog slaughter is running 2.1% under 2020 levels.

 

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