After the Bell | November 23, 2021

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Corn: December corn futures rose 3 3/4 cents to $5.80 1/2, the contract’s highest settlement since $5.89 on July 1. March corn, now the most-active contract, rose 4 cents to $5.88 1/4. Corn futures closed near a five-month high as the market climbed in late trade behind spillover support from wheat, which extended a rally to nine-year highs, and crude oil, which jumped over 2.0%. Broader concern over rising inflation continued to lift commodities, while corn futures remained supported by strong demand from domestic ethanol producers. The U.S. corn harvest is nearly finished. Late yesterday, USDA reported the U.S. harvest at 95% complete as of Nov. 21, up from 91% a week earlier and slightly under trade expectations for 96%. Growing conditions in South America remain largely favorable, though a drier pattern is expected to develop in some parts of Brazil over the weekend, according to World Weather Inc.

Soybeans: January soybean futures fell 1 1/4 cents to $12.73. January soymeal fell $7.60 to $356.10 per ton. January soyoil rose 73 points to 60.08 cents per pound, near a three-week high. Soybeans were pressured by selling in the meal market, though late strength in soyoil pulled soybeans off the lows. Tomorrow likely will bring lighter trade ahead of the Thanksgiving Day holiday. South American weather remains generally favorable, though traders will be watching a drier pattern expected to develop in far southern Brazil and parts of northern Argentina. Forecasts signaling below-normal precipitation in these areas through January. Consultant Michael Cordonnier left his Brazilian soybean crop estimate at 144 MMT, a record, but shifted his bias to “neutral” from “neutral to slightly higher” in previous weeks, citing a drier forecast for southern Brazil. 

Wheat: March SRW wheat rose 10 cents to $8.67 1/2 today, after posting a contract high at $8.68 1/4. Nearby December closed at a nine-year high. March HRW wheat rose 17 1/2 cents to $8.84, after hitting a contract at $8.85. March spring wheat futures rose 13 3/4 cents to $10.45 1/2. USDA’s weekly crop ratings showed an unexpected deterioration in winter wheat. USDA said 44% of the crop was in “good” or “excellent” condition as of Nov. 21, down from 46% the previous week. Analysts had expected the rating to hold at 46%. Winter wheat rated “poor” or “very poor” rose to 22% as of Nov. 21 from 20% last week. When USDA’s weekly crop condition ratings are plugged into the weighted Pro Farmer Crop Condition Index (0 to 500-point scale, with 500 being perfect), the HRW crop declined 3.3 points to 329.6, while the SRW crop fell 9.4 points to 357.8. Global supply concerns also lifted wheat. Recent heavy rains in Australia’s wheat-growing regions likely caused some output and quality reduction.

Cotton: December cotton futures rose 265 points to 120.36 cents per pound, while March futures fell 31 points to 115.66 cents. Profit taking in March cotton futures was featured among the shorter-term traders today, after prices hit a contract high last week. A strong U.S. dollar may be limiting buying interest in the most-active March cotton futures contract. The U.S. dollar index hit a 16-month high today. A sell off in the U.S. stock indexes early this week that has produced some technical damage may also be keeping the bulls on the sidelines in the futures market. No delivery notices were issued for December cotton futures today, on first-notice day. Cotton traders are also closely watching the plunging value of the Turkish lira, which fell to a record low against the U.S. dollar today. Turkey is an important U.S. cotton importer – the country was the fourth-largest destination for U.S. cotton last year at 1.287 million bales.

Cattle: February live cattle futures rose 45 cents to $139.425, the contract’s highest closing price since $139.60 on Aug. 25. December live cattle rose 97.5 cents to $135.40, the highest settlement for a nearby contract since April 2017. January feeder cattle rose $2.675 to $164.375, the highest close since Sept. 3. Live cattle futures closed near a three-month high as a strong cash market extended its run to 4 1/2-year highs. Light trading at live steer prices at $136 were reported in the Southern Plains and $137 in Nebraska, $3.00 to $4.00 above last week’s levels. Last week, live steers in five top feedlot regions last week averaged $133.11, up for seventh straight weekly gain and the highest weekly average since June 2017. Feeder cattle futures rose despite strength in the corn market. Wholesale beef prices appear to have stabilized after a recent drop under $280.00 in Choice cutout values appear to generate greater retail demand. Choice cutout values fell 61 cents today to an average of $278.64, down from last week’s $280.58 average. Slaughter so far this week totaled an estimated 244,000 head, up 1,000 from the same period last week.

Hogs: December lean hog futures slipped 50 cents to $74.15, while most-active February rose 25 cents to $83.275. Hog futures traded mixed, with traders seemingly anticipating sustained short-term weakness but a strong recovery in the new year. USDA’s September Hogs and Pigs report implied December-February hog slaughter would run about 6% under year-ago levels. Last week’s total at 2.629 million head fell 3.6% below the comparable year-ago figure, thereby continuing a string of similar reductions. The numbers raise the question of whether slaughter in the months ahead will exceed the large projected declines, which in turn might keep downward pressure upon prices. Pork cutout values fell $1.33 today to an average of $84.92, near a seven-month low of $84.52 reached last week. Movement remained relatively strong at about 325 loads. The CME lean hog index showed signs of stabilizing, with the next quote expected to rise 29 cents to $73.17, still down 22% since the beginning of October. National direct carcasses rose 50 cents to $55.41.


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