After the Bell | October 25, 2021

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Corn: December corn futures settled unchanged at $5.38 after earlier rising to $5.42, the highest intraday price since $5.44 3/4 on Oct. 6. Corn futures climbed near a three-week high overnight with support from wheat and soybean market strength but failed to find much followthrough buying interest during the day session. Rains across much of the Midwest will slow harvest this week, though progress so far has been ahead of the normal pace. USDA late today reported the U.S. corn harvest was 66% complete as of yesterday, up from 52% the previous week and ahead of the 53% average for the previous five years. Progress was slightly above trade expectations for 65% harvested. Disappointing export news muted buying interest. USDA reported 545,127 MT of corn was inspected for export during the week ended Oct. 21, down from 1.049 MMT the previous week. Inspections fell short of trade expectations for 750,000 to 1.2 MMT. Inspections for the 2021-22 marketing year to date totaled 4.713 MMT, down nearly 24% from the same period a year earlier.

Soybeans: November soybean futures gained 16 3/4 cents to $12.37 1/4 a bushel. December soymeal fell 20 cents to $$327.20 per ton, while December soyoil rose 105 points to 63.14 cents per pound. Soybeans and soyoil were both boosted by speculative buying and recent strength in global vegetable oil markets. Managed money cut its net long position in the soybean market to 15,274 futures contracts as of Oct. 19, their smallest long stance since early June 2020. Weekly soybean export inspections totaled 77.3 million bu., down from 90.0 million bu. the previous week and below the seasonal norm of between 80-million bu. to 90-million bushels. But based on recent revisions the following week, the number is likely to end up within the normal range. The soybean harvest was 73% complete as of yesterday, up from 60% a week earlier and ahead of the 70% five-year average, but slightly below trade expectations around 74%.

Wheat: December SRW wheat rose 3 1/2 cents to $7.59 1/2 a bushel, the highest closing price since $7.75 on Aug. 16. December HRW wheat rose 3 3/4 cents to $7.77 3/4, after hitting a contract high and seven-year high at $7.82 1/4 earlier. December spring wheat futures rose 14 cents to $10.27, after hitting a contract high at $10.31. Strong demand amid tightening global supplies continues to drive wheat futures markets higher, with dry weather in the U.S. Plains adding to the bullish tone. Traders looked past disappointing weekly U.S. export inspections numbers. USDA reported 140,413 MT of wheat was inspected for export during the week ended Oct. 21, down from 141,450 MT the previous week. Trade expectations ranged from 150,000 to 450,000.

Late today, USDA, in its initial crop condition ratings for the U.S. winter wheat crop, reported the crop in 46% “good” or “excellent” condition as of yesterday, up from 41% a year ago and well-below trade expectations for 56%. The winter wheat crop was 80% planted, up from 70% a week ago and matching the five-year average.

Cotton: December cotton futures rose 28 points at 108.54 cents, while March cotton rose 37 points to 106.56 cents. Cotton futures extended last week’s consolidation as traders waited for market-moving news. Global fundamentals remain bullish, meaning the market could extend the recent rally. Veteran cotton analysts point out that U.S. cotton shipped to China, including shipping costs and taxes, is presently cheaper than China’s domestic cotton prices. Chinese players may be purchasing cotton as a store of value and an inflation hedge, thus driving China’s cotton prices up even more. Cotton market commercial traders are now basing their transactions off the March futures contract, due to the high volatility and highly speculative trading going on in the nearby December contract. USDA late today reported the cotton crop was 35% harvested as of yesterday, up from 28% a week earlier but behind the five-year average of 41%.

Cattle: December live cattle futures rose $1.20 to $129.525 per hundredweight, up from a two-week closing low Friday. January feeder cattle rose $1.25 to $158.575. Live cattle futures climbed after USDA on Friday reported an unexpected decline in feedlot placements in September. Feedlot operators placed 2.163 million head of cattle on feed during September, down 2.9% from the same month a year earlier, according to USDA’s Cattle on Feed Report Friday. Analysts on average projected an increase of about 1.4%, based on a Reuters survey. An estimated 11.55 million head of cattle were on feed as of Oct. 1, down 1.4% from a year earlier and larger than the 0.6% decline analysts expected. The smaller numbers underscore the industry’s herd contraction in recent years and indicates beef supplies in the pipeline for 2022 will remain limited. Futures also gained support from recent firming in the cash market and signs of stabilization in boxed beef prices. Live steers in five top feedlot areas last week averaged $124.39, up 0.4% for the week and the third consecutive weekly gain. Choice cutout values rose $1.22 today to an average of $283.04, the highest since $283.27 on Oct. 8.

Hogs: December lean hog futures rose 87.5 cents to $74.20 per hundredweight, the second consecutive daily gain after prices fell to a one-month low last week. Nearby lean hog futures posted a moderate corrective bounce after tumbling 6.3% last week. Weak cash fundamentals continue to burden the market. Pork cutout values fell $3.69 today to an average of $94.58, the lowest since $93.52 on March 4. Pork cutout values fell 3.0% last week. Tomorrow’s CME lean hog index is expected to drop 72 cents; the current reading, $83.70, is the lowest since $83.27 on March 2. Carcasses on national direct markets fell $1.97 to an average of $63.66, after dropping 2.5% last week.

 

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