After the Bell | October 29, 2021

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Corn: December corn futures rose 5 1/2 cents to $5.68 1/4, up 30 1/4 cents (5.6%) for the week and the highest closing price since $5.68 3/4 on Aug. 16. The lead contract also gained 31 1/2 cents (5.9%) for the month, the second straight monthly advance. Corn futures ended a strong week at a 2 1/2-month high on bullish demand signals from the ethanol industry and expectations rain across the Midwest will impede the final stages of harvest. Rains slowed harvest this week and more is in the forecast for the weekend, though harvest was running ahead of the average pace and drier conditions may return in early November. Key reports next week include USDA’s weekly Crop Progress and Grain Crushings, both scheduled for Monday after the close, as well as the Energy Department’s weekly ethanol production report. Corn futures’ stronger technical posture could produce followthrough buying early next week.

Soybeans: January soybeans rose 3 1/2 cents to $12.49 1/2, up 18 3/4 cents (1.5%) on the week. December soybean meal futures rose $1.70 to $332.60, up $5.20 for the week. December soybean oil futures rose 40 points to 61.27 cents but fell 82 points for the week. Fresh export business generated little buying interest. USDA’s early today reported U.S. soybean export sales of 132,000 MT to “unknown” destinations, as well as 222,350 MT of sales received during the reporting period for delivery to unknown destinations. This week’s sideways price action in soybeans raises doubts whether the market can extend a most recent rally. USDA will release its monthly oilseed crushings report Monday afternoon. U.S. soybean crushings likely declined to 4.907 million short tons, or 163.6 million bushels, in September, according to the average forecast. There were 168.2 million bushels processed in August.

Wheat: December SRW futures rose 1/4 cent to $7.72 3/4, the highest closing price for a nearby contract since May 7. HRW futures fell 4 1/4 cents to $7.85 3/4, up 1.5% for the week but down from a 7 1/2-year high close at $7.90 yesterday. December spring wheat surged 14 3/4 cents to $10.52 1/4, the highest closing price since June 2011. Bulls have strong momentum, especially in the spring wheat market. Given strengthening bullish attitudes, it seems more likely any corrective pullback would attract fresh buyers. Wheat retains a bullish bias even as recent export sales disappointed. Through Oct. 21, accumulated U.S. wheat exports were down 19% from last year and total export commitments (exports plus outstanding sales) were down 22%. Global ending wheat stocks are forecast to drop 3.9% from the 2020-21 marketing year, but still be plentiful. But global high-protein supplies are limited. Still, export demand for U.S. wheat will eventually have to improve to sustain current or higher price levels.

Cotton: December cotton futures rose 112 points to 114.85 cents per pound, up 6.1% for the week and the highest settlement for a nearby contract since July 2011. The industry likely feels the supply situation is mostly settled at this point, since the projections of the cotton harvest don’t often shift a great deal in late fall. Traders are looking ahead to the Nov. 4 USDA export sales report, since recent sales have run far ahead of historical norms, despite greatly elevated prices. On Nov. 9, USDA updates its Crop Production and Supply and Demand estimates. Traders will watch for any revisions USDA makes to its 2021 U.S. cotton production forecast, as well as adjustments to 2021-22 exports and the projected U.S. and global carry-out figures for the current crop year.

Cattle: December live cattle futures fell $1.05 to $129.275, up 0.7% on the week and up 2.8% for the month. November feeder futures dropped $1.075 to $156.575, down 0.2% for the week. Focus next week in large part will be on the wholesale beef market, which appears to have established a near-term bottom following a two-month slump. Choice beef cutout values rose 83 cents today to an average of $285.72, which would be the highest since $286.62 on Oct. 6. Sustained wholes beef gains may translate into a continuation of the recent rally in cash cattle values. Late today, USDA reported live steers in five top feedlot regions at an average of $126.29, up nearly $2.00 from last week’s $124.39 average. Meanwhile, feeder traders will likely be taking their cue from shifts in the corn market, since further increases in the implied cost of feed would almost surely reduce feedlot demand for replacement yearlings. Meatpackers slaughtered an estimated 668,000 head of cattle this week, up 1.1% from last week and up 4.4% from the same week last year. Slaughter so far in 2021 is up 3.2% from 2020 levels at this point.

Hogs: December lean hog futures rose 87.5 cents to $76.075, up 3.8% for the week and the highest closing price since $77.40 on Oct. 19. Hog futures’ late-week recovery suggests the market put in a near-term bottom this week. There are growing ideas wholesale pork values have also established seasonal bottom. Pork cutout values rose $2.52 today to $96.52, down from $98.27 at the end of last week but up from nearly eight-month lows earlier in the week. Movement was strong at 379 loads. Carcasses on national direct markets fell 82 cents to $61.70, down 6.0% this week. The latest CME lean hog index fell 97 cents to $80.70, the lowest level since the same price on Feb. 25. The outlook for smaller U.S. pork supplies continues to support deferred futures. This week’s hog slaughter totaled an estimated 2.551 million head, down 1.8% from last week and down 5.3% from the same week a year ago, USDA reported. So far this year, slaughter is running 2.0% below last year’s levels at this point.

 

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