After the Bell | November 9, 2021
Corn: December corn futures rose 3 1/4 cents to $5.54 3/4, after falling as low as $5.47 3/4 earlier, a low for the month. Corn futures climbed after USDA’s unexpected cut to the estimated U.S. soybean harvest sparked a rally in the soy complex. Many key numbers in USDA’s Crop Production report appeared slightly bearish, with the average U.S. yield hiked 0.5 bu. to 177.0 bu. per acre, a record. USDA left harvested area unchanged at 85.085 million acres and raised its 2021 harvest projection to 15.062 billion bu., up 43 million bu. from October and 12 million above analyst forecasts. Estimated 2021-22 U.S. corn carryover was trimmed by a smaller-than-expected 7 million bu., to 1.493 billion bu., while global carryout rose to 304.22 MMT from 301.74 MMT in October. While USDA’s numbers weren’t particularly bullish for corn, futures losses over the past few trading sessions suggested traders anticipated an increase in available supplies.
Soybeans: January soybean futures rose 21 1/2 cents to $11.99 1/2, after falling earlier in the day to the lowest price in over seven months. December soybean meal rose $10.70 to $342.50 per ton, the highest close since Sept 16. December soybean oil rose 42 points to 58.47 cents per pound. Soybean futures rallied after USDA unexpectedly lowered its projection for the U.S. soybean harvest. USDA cut its 2021 production estimate to 4.425 billion bu., down 23 million bu. from an October estimate. The average U.S. yield was lowered 0.3 bu. to 51.2 bu. per acre. Analysts were looking for a production increase of about 36 million bu. and an increase of 0.4 bu. in the average yield. The reduced harvest number in part reflects lower yields in Indiana, Iowa, Kansas and Iowa. USDA also raised estimated ending U.S. soybean stocks for the 2021-22 marketing year by a lower-than-expected 20 million bu., to 340 million bu. Traders expected an increase closer to 42 million bu.
Wheat: December SRW futures rose 10 1/2 cents to $7.78 1/2, while December HRW futures rose 12 3/4 cents to $7.93 1/2. December spring wheat rose 15 cents to $10.23 3/4. Wheat futures rose sharply in step with the USDA-driven rally in the soy complex. USDA’s Crop Production and Supply and Demand reports today were largely price-neutral for wheat. Projected U.S. wheat supplies at the end of the 2021-22 marketing year were raised 3 million bu., about 2 million bu. above the average analyst estimate. USDA trimmed 10 million bu. from total U.S. supplies with imports down the same amount from last month, at 115 million bushels. On the demand-side of the balance sheet, USDA reduced total expected use by 13 million bu., which reflected in part smaller estimated exports, cut 15 million bu. to 860 million bu. USDA lowered its forecast for global 2021-22 ending stocks by 0.5% to 275.87 MMT, down from 277.18 MMT in an October forecast and a larger reduction that traders anticipated.
Cotton: December cotton rose 283 points to 119.38 cents per pound, near a 10-year closing high of 119.84 posted Nov. 1. The cotton market extended a rally on a strong demand outlook, even as UDSA numbers today weren’t exceptionally bullish. In its monthly Supply and Demand report, USDA forecast U.S. cotton production at 18.198 million bales, higher than trade expectations for 18.040 million bales. USDA increased its yield by 9 lbs. to 880 lbs. per bale and left harvested area unchanged at 9.922 million acres. Among top cotton states, USDA raised its estimated Texas yield by 9 lbs. and its Georgia yield by 21 lbs. per acre. Global carryover saw cotton stocks at 86.93 million bales for 2021-22 down from 87.13 million bales in an October forecast and down from 89.28 million bales in 2020-21.
Cattle: December live cattle rose 10 cents to $132.20, the highest closing price in over two months. Deferred futures ended lower. November feeder cattle fell 67.5 cents to $157.90. After cash prices neared four-year highs last week, trade this week is likely to be steady-weaker, though some trade at $130.00 was reported so far this week. Live steers in five top feedlot areas averaged $129.23 last week, the fifth consecutive weekly increase and the highest weekly average since February 2018. Still, feedlots sold large numbers of cattle last week and packers may be reluctant to pay up this week. Choice beef cutout values fell 85 cents today to an average of $287.80. In its latest monthly Supply and Demand report, USDA raised U.S. beef production from last month on higher expected slaughter and heavier carcass weights. Cattle price forecasts for 2021 and 2022 were raised on continued firm demand.
Hogs: December lean hog futures fell $1.425 to $74.95, the lowest closing price in a week. Soft cash fundamentals continued to weigh on hog futures. After a brief rally last week, pork cutout values have tumbled sharply, sinking $2.31 today to an average of $92.55, near an eight-month low. A recent uptick in the CME lean hog index may also be short-lived, with the preliminary quote down 6 cents at $79.23. Still, hog numbers are down significantly from last year, as indicated by last week’s slaughter total at 2.603 million head, 3.5% below the comparable week in 2020. Recent weekly slaughter declines, as well as persistently low frozen pork stockpiles, suggest the cash market may post an early low this year.
