After the Bell | November 4, 2021
Corn: December corn futures fell 4 3/4 cents to $5.59 1/4, the lowest settlement since $5.57 1/4 on Oct. 27. Futures fell for a third straight day on profit-taking from the early-week rally to 2 1/2-month highs, with additional pressure from U.S. dollar strength and general weakness across commodity markets, including Nymex crude oil sinking to four-week lows. The U.S. dollar index rose to a three-week high. Relatively strong weekly USDA export sales had little price impact in corn. USDA reported net U.S. corn export sales at 1.224 MMT for the week ended Oct. 28, up 37% from the previous week and up 10% from the average for the previous four weeks. The sales were at the high end of trade expectations ranging from 700,000 MT and 1.4 MMT. Trade focus is shifting to USDA’s Nov. 9 Crop Production report, which is expected to show the estimated U.S. corn harvest up 0.2% from an October projection, to 15.05 billion bu., based on a Reuters survey of analysts. The estimated average nationwide yield is expected to increase to 176.9 bu. per acre, up 0.1 bu.
Soybeans: January soybean futures plunged 21 1/2 cents to $12.22 3/4 a bushel, the lowest closing price since $12.15 1/2 on Oct. 14. December soybean meal fell $5.00 to $335.80 per ton, while December soybean oil fell 145 points to 59.58 cents a pound, the lowest close since Oct. 12. Soybeans fell sharply as technical selling accelerated after prices broke below lows from the past week and traders looked ahead to USDA’s Nov. 9 Crop Production report, which is expected to show a slight increase in the U.S. harvest estimate. Soyoil was pressured by sharp declines in Nymex crude oil futures. Relatively strong export sales had little price impact. USDA said net U.S. weekly soybean sales for the week ended Oct. 28 totaled 1.864 MMT, up 58% from the previous week and up 19% from the four-week average. China was a prominent buyer at 1.207 MMT. Trade expectations ranged from 1 MMT to 2 MMT. Total sales commitments for soybeans so far in 2021-22 lag last year’s levels at this point by about 33%.
Wheat: December spring wheat futures plunged 27 cents to $10.17, extending this week’s corrective pullback. December SRW futures fell 7 1/4 cents to $7.73 3/4. December HRW futures dropped 4 3/4 cents to $7.86. Wheat futures failed to hold earlier gains and were led lower by spring wheat, which took the bulk of the liquidation pressure, though there was little apparent fundamentally driving the weakness. USDA’s weekly export sales for wheat improved from recent weeks, totaling 400,100 MT, but still failed to provide much inspiration. While a lot of wheat continues to trade worldwide, relatively high prices have the U.S. on the outside looking in for much of the business. As of Oct. 28, wheat export commitments (exports plus outstanding sales) were 22% behind year-ago and 15% behind the five-year average. USDA forecasts wheat exports will drop 11.8% in 2021-22 and year-to-date data supports our belief that the agency may lower that projection in its Nov. 9 Supply and Demand report.
Cotton: December cotton futures fell 236 points to 116.46 cents per pound, down from a 10-year high of 121.67 cents reached Nov. 2. Futures are still up 24% over the past two months. Cotton futures fell on disappointing weekly export sales and spillover pressure from other commodities, including wheat and Nymex crude oil, the latter of which tumbled over 3.0% to a four-week low. Dollar strength fueled downside pressure, with the U.S. dollar index rising to a three-week high. Early today, USDA reported net U.S. cotton sales totaling 139,100 running bales (RB) for the week ended Oct. 28, down 61% from the previous week and down 51% from the average for the previous four weeks. Prominent buyers included China (44,800 RB), India (24,300 RB), Turkey (23,700 RB) and Vietnam (18,100).
Cattle: December live cattle fell $1.025 to $130.625, while November feeder cattle fell $1.15 to $158.025. Futures were pressured by profit-taking and corrective pullback following gains earlier this week. Cash market fundamentals continued to improve, with live steers in five top feedlot areas today averaging $128.10, up 1.4% from last week's $126.29 average. Some trade at $129.00 was reported yesterday in Nebraska. Feedlot operators appear to be digging in their heels, seeking higher prices amid signs of improving demand. Choice beef cutout values rose $1.73 today to $290.22, the highest in nearly five weeks, while Select grade rose 50 cents. Movement totaled 147 loads. USDA earlier today reported net weekly U.S. beef sales of 16,700 MT, down 13% from the previous week but up 15% from the four-week average. South Korea (6,700 MT) and China (2,800 MT) were prominent buyers. Cattle slaughter so far this week totaled an estimated 487,000 head, down 0.2% from the same period last week and down 1.0% from the same period in 2020, USDA reported.
Hogs: December lean hog futures jumped $1.925 to $77.875, the highest closing price since $78.75 on Oct. 18. Hog futures gained an early boost from USDA’s weekly export sales report, which showed net U.S. pork sales reached 45,700 metric tons for the week ended Oct. 28, topping the week prior result by 55% and the average for the previous four weeks by 72%. Whether that buying pace will be sustained is an open question, but strong sales figure suggests wholesale pork prices have fallen far enough to spur overseas buying interest. Pork cutout values fell $2.75 today to $97.69, down from a two-week high yesterday. Movement was strong at 418 loads. Cash indicators remain weak, as the preliminary CME Lean Hog Index quote fell 38 cents to $78.32, the lowest since late February and still about 45 cents above December futures. National direct carcasses fell 86 cents to $59.82. Hog slaughter so far this week lagged last week, at an estimated 1.901 million head through today, down 1.0% from the same period last week and down 2.8% from the same period in 2020.
