After the Bell | October 26, 2021

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Corn: December futures rose 5 1/2 cents to $5.43 1/2, the highest closing price since $5.53 3/4 on Aug. 27. December 2022 futures posted a new contract high of $5.40 3/4 before settling at $5.36 3/4. Price action was quiet until midmorning when the corn market caught a bid. Much of the price strength was technically driven as futures bounced off support and then found buy stops above unchanged. Fundamental news and support were lacking today. Corn harvest is running around a week ahead of average, though recent rains will slow efforts, especially in the eastern Corn Belt, where progress is already behind normal. It’s unlikely short-term harvest delays will be supportive enough to trigger sustained buyer interest. The market likely needs a shot of fresh demand news to uncover sustained buyer interest unless funds decide they want to aggressively add to their net long position.

Soybeans: November soybeans rose 3/4 cent to $12.38, up from the 6 1/2-month closing low of $11.95 1/4 posted Oct. 13. December soybean meal fell 30 cents to $326.90 and December soybean oil fell 83 points to 62.31 cents. Expectations rain across much of the Midwest this week will slow fieldwork was mildly supportive, but the soybean harvest has been running ahead of the usual pace. USDA reported yesterday the U.S. soybean harvest was 73% complete as of Oct. 24, up from 60% a week earlier and ahead of the 70% five-year average, but slightly below trade expectations of about 74%. U.S. harvest delays resulting from the heavy rainfall in the Midwest will continue for this week especially due to follow-up rain expected tomorrow into Friday, World Weather Inc. said today. USDA reported two daily soybean sales for the 2021-22 marketing year – 199,000 MT sold to China and 125,730 MT sold to Mexico. Before today, USDA hadn’t reported any soybean sales to China since Oct. 15. Export sources expect more soybean sales to be announced in the coming days.

Wheat: December SRW futures fell 7 1/4 cents to $7.52 1/4. December HRW fell 1/2 cent to $7.77 1/4, after rising earlier to $7.90, the highest intraday price for a nearby contract since May 2014. December spring wheat fell 5 1/2 cents to $10.21 1/2, after reaching $10.47, a contract high for the fifth day in a row. Wheat futures posted modest losses despite a seemingly bullish numbers in USDA’s first condition ratings for the 2021-22 crop. Weekend rains across the Wheat Belt and forecasts for more at mid-week may improve moisture conditions for winter wheat, potentially improving early prospects for the spring-summer harvest. USDA rated the winter wheat crop at 46% “good” or “excellent” as of Oct. 24, up from 41% a year ago but well-below industry expectations of 56%.

Cotton: December futures ended the day with a low-range close of 108.71 cents per pound, up 17 points after having reached 109.55 at the daily high. There was little fresh news in the cotton market today. Yesterday’s USDA Crop Progress report held few major surprises, with crop conditions as of Oct. 24 at 64% “good” or “excellent,” unchanged from last week. The crop was 35% harvested as of Oct. 24, up from 28% a week earlier but behind the five-year average of 41%. Given the tendency for the Texas cotton harvest to extend into early winter, this is unlikely to greatly affect prices. Reports China will auction 30,007 MT of cotton from state reserves had little market impact.

Cattle: December live cattle rose $1.925 to $131.45, the highest closing price since $132.20 on Sept. 2. November feeder cattle rose $1.30 to $159.775. Continued strength in cash fundamentals boosted cattle futures near an eight-week high. Choice cutout values rose $1.72 to $284.76, the highest since $285.30 on Oct. 7. Movement totaled about 136 loads. It’s expected that cash cattle prices will trade steady to firmer this week as the feedlot operators may be gaining some ground on the packers. There are reports of cash cattle $124 bids in the southern regions and $126 in the north. Dressed steer weights are also on the decline, which is a positive. Today’s cattle slaughter is estimated at 122,000 head, compared to 121,000 last Tuesday and 119,000 one year ago at this time.

Hogs: December lean hogs fell $1.625 to $72.575, the lowest closing price since $72.25 on Sept. 15. The lead-month contract is down 15% from a two-month closing high at $85.40 on Sept. 30. Hog futures settled at a six-week low as the market remained under pressure from poor cash fundamentals and the ongoing technical breakdown on the daily charts. Pork cutout values fell 26 cents to an average of $94.32, the lowest since early March. Tomorrow’s CME lean hog index is expected to drop 32 cents to $82.66, which would be the lowest since $82.63 on March 1. Carcasses on national direct markets averaged $63.81, up 15 cents. U.S. hog numbers are down from last year and an outlook for even smaller supplies in 2022 may eventually put a floor under futures, but for now, bearish momentum rules the day.

 

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