After the Bell | November 24, 2021
Corn: December corn futures fell 3/4 cent to $5.79 3/4, after rising earlier in the session to $5.89, the highest intraday price since $5.94 1/4 on Aug. 12. Most-active March futures fell 2 3/4 cents to $5.85 1/2. Corn futures declined in light activity as pre-holiday liquidation pressured grain and soy markets. December corn pushed above a longer-term downtrend line drawn from the May and June highs but failed to close above that level, suggesting stiff resistance and selling interest in the $5.90 to $6.00 region. Exports that continue to lag last year’s pace have limited price upside. USDA’s next weekly export sales report, delayed till Friday due to the Thanksgiving holiday, is expected to show corn sales ranging from 750,000 MT to 1.4 MMT for the week ended Nov. 18. Robust demand from U.S. ethanol producers, if sustained, may buoy corn futures through the rest of 2021. Early today, the Energy Information Administration reported weekly ethanol production at an average of 1.079 million barrels per day (bpd) for the week ended Nov. 19, up 19,000 barrels, or 1.8%, from the previous week.
U.S. markets and government offices are closed tomorrow for Thanksgiving. On Friday, ag markets are open for an abbreviated trading schedule from 8:30 a.m. CT to 12:05 for grains and 12:15 for livestock.
Soybeans: January soybean futures fell 6 1/2 cents to $12.55 1/2. March soybean meal futures fell $4.60 to $357.60 per ton and March soybean oil gained 60 points to 60.26 cents. Soybeans saw selling pressure due in part to losses in the wheat and corn futures markets. In the coming days, soybeans will likely continue to look to wheat and corn for direction. The soymeal futures market this week has slumped by over $12 from last Friday’s close. The fading meal market may be sending an ominous signal to the soybean market bulls. Friday’s weekly USDA export sales report (delayed one day by the Thanksgiving holiday) is expected to show U.S. soybean sales of 900,000 to 1.8 million metric tons in the 2021-22 marketing year. Growing conditions in South America’s soybean regions remain mostly favorable. If that continues to be the case in the coming weeks, speculation will only increase that Brazil will harvest a record soybean crop in 2022.
Wheat: December SRW wheat dropped 19 1/4 cents to $8.36 3/4 and posted a key bearish reversal after earlier marking a new contract high. December HRW futures fell 5 1/2 cents to $8.73 1/4. March spring wheat fell 1/2 cent to $10.45. Traders took profits out of the long side of the market ahead of Thanksgiving, especially in SRW contracts. That makes price action over the next week key in determining if the market has posted a top or the pre-holiday break was just a correction in the bull market. Given that funds have actively extended their net long wheat positions recently, there’s certainly some risk that an extended price pullback could develop. Support for the latest leg up in prices has come from heavy late-season rains in Australia, which are hurting crop quality. The country will have plenty of wheat this year, as the crop is expected to be the second largest ever, but there will be far more feed quality supplies and less milling quality than normal.
Cotton: December cotton futures posted another contract-high close at 120.38 cents per pound, up 2 points. Most-active March futures rose 12 points to 115.78. The cotton industry is looking to USDA’s weekly export sales report for an update on foreign demand. Export numbers have fallen substantially since futures surged to fresh highs in early November, indicating a demand drop-off. Another poor weekly result would likely increase overhead resistance faced by bulls, whereas strong sales and/or shipments figures might open the door to a fresh bullish surge. Next week’s market action will probably be heavily influenced by Friday’s result, since many traders and industry insiders take Black Friday off. Aside from the weekly USDA export sales, traders will be looking forward to the December 9 USDA Crop Production and Supply and Demand reports.
Cattle: December live cattle rose $2.50 to $137.90, the highest settlement for a nearby contract since April 2017. February live cattle rose $1.45 to $140.875. January feeder cattle climbed $2.55 to $166.975. Futures extended a rally to 4 1/2-year highs amid continued cash market strength. Two major packers reportedly boosted their bids for fed cattle to $138 by late morning today, with some talk of bids having reached $139 early this afternoon. Most feedyard managers were reportedly passing, since it appears market-ready fed cattle supplies aren’t meeting packer needs. Reports of $140 trading filtered in before the futures close. Late today, USDA reported live steers in top feedlot areas at an average of $136.46, We expect heavy trading to occur as producers start taking packer bids, which may give packers the ability to hold the line next week, especially since they’ll soon gain access to contracted cattle for December. That might open the door to a short-term futures setback, which would seem likely if recent choice-beef cutout stability around $279 fails and wholesale prices turn lower. Choice cutout values rose 47 cents to $279.21
Hogs: February lean hog futures rose 97.5 cents to $84.25, the highest closing price since $84.35 on Oct. 7. Hog futures bulls gained momentum today as the market ended light pre-holiday trade at a six-week high. Prices are trending strongly higher on the daily bar chart, suggesting more upside in the near term. There are growing ideas the cash hog market has established an early seasonal low. Carcasses on national direct markets rose 25 cents to $55.56, according to USDA. The CME Lean Hog index rose 27 cents to $73.15, more than $2.00 below December hog futures. Pork cutout values rose 6 cents today to $84.98. Movement was strong at nearly 413 loads.