After the Bell | October 20, 2021
Corn: December corn futures rose 9 cents to $5.39 1/4 a bushel, the contract’s fourth gain in the past five sessions and highest closing price since $5.40 3/4 on Oct. 4. Corn futures ended near a 2 1/2-week high as signs of strengthening export demand fueled ideas the market may have established a harvest low (harvest was 52% completed as of Oct. 17, USDA said). Traders will scrutinize tomorrow’s USDA weekly export data tomorrow for further confirmation of a recent pick-up in demand. Net U.S. corn sales for the week ending Oct. 14 are expected to range from 700,000 MT to 1.4 MMT, based on a Reuters survey of analysts. The previous week’s corn sales, at 1.04 MMT were up 85% from the average for the previous four weeks, in part reflecting the recovery of U.S. gulf export capacity from hurricane damage. Price upside may be limited by ongoing harvest pressure and the prospect USDA could further hike its harvest estimates in next month’s crop production update.
Soybeans: November soybean futures surged 17 1/2 cents to $12.45 1/2 per bushel, the highest closing price since $12.50 1/2 on Oct. 5. December soyoil jumped 2.31 cents to 64.70 cents per pound, near a three-month high. December soymeal gained $5.80 to $328.40 per ton. The soy complex surged amid renewed export optimism and spillover from strong palm and crude oil markets. Strong export inspections early this week combined with Chinese purchases last week to encourage beliefs the recent price slump stirred fresh overseas demand and that soybean futures may have put in a harvest low. Tomorrow’s weekly USDA export sales report is expected to show net U.S. soybean sales between 1.5 MMT and 2.5 MMT for the week ended Oct. 14, compared to 1.15 MMT the previous week.
Wheat: December HRW wheat rose 11 1/2 cents to $7.59 3/4, the highest closing prince for a nearby contract since May 2014. December spring wheat rose 15 1/2 cents to $9.89 3/4, the highest settlement for a nearby contract since 2012. December SRW wheat rose 13 1/4 cents at $7.49 1/4 a bushel. Tight world supplies and dry weather in the U.S. Plains continued to propel wheat futures higher. Dry conditions in much of the HRW wheat belt may lead to sub-optimal plant establishment. A weaker U.S. dollar and strong crude oil futures also supported grain markets. Tomorrow’s weekly USDA export sales report is expected to show U.S. wheat sales of 250,000 to 650,000 MT for the week ended Oct. 14, compared to 567,600 MT in last week’s report.
Cotton: December cotton futures rose 290 points to $1.1073 cents a pound, the highest closing price since $1.1060 on Oct. 8. Tighter supplies and strong U.S. exports continue to support the cotton futures market. Traders reckon demand will remain strong enough to more than offset an expected bountiful U.S. cotton harvest. Outside markets were supportive, as the U.S. dollar index weakened, crude oil prices rose near a seven-year high and U.S. stock indexes climbed near record levels. Tomorrow’s weekly USDA export sales report will help gauge global demand.
Cattle: December live cattle rose 95 cents to $125.95 per hundredweight, down from $130.975 at the end of last week. November feeder cattle rose 50 cents to $159.35. Cattle futures posted modest gains on hopes for stabilization in wholesale beef prices and expectations for a continuation of firmer cash markets this week. But Choice cutout values fell 85 cents today to an average of $280.03, 1 cent above a 2 1/2-month low reached Oct. 13. Movement totaled 128 loads. On cash cattle markets, USDA today reported live steers in five top feedlot regions averaged $124.04, compared to an average of $123.84 for all of last week. The market awaits USDA’s Cattle on Feed Report Oct. 22. Some analysts expect USDA to report a second consecutive month of higher-year-over-year feedlot placements, up around 1.2% annually, based on one report. In last month’s report, USDA reported an unexpected 2.3% year-over-year increase in August feedlot placements.
Hogs: December futures fell $1.375 to $76.025 per hundredweight, the lowest closing price since $73.375 on Sept. 22. Hog futures plunged to near a one-month low amid technical breakdown on the daily chart and pessimism over the short-term market outlook. Hog and pork production has risen to around the highest levels of the year, and wholesale pork prices have tumbled to seven-month lows. The next CME lean hog index is expected to fall to $85.89, the lowest since early March. Pork cutout values fell $2.40 today to $96.87, the lowest daily price since $94.93 on March 8, indicating that high retail meat prices have crimped consumer demand. Carcass values on national direct markets fell 4 cents to an average of $66.93. This week’s slaughter is running slightly ahead of last week’s pace, at an estimated 1.428 million head through today, up 1,000 head from the same period last week but down 2.2% from the same period a year ago, USDA data showed.
