After the Bell | September 29, 2021

Corn: December corn futures rose 6 1/2 cents to $5.39 a bushel, the highest closing price since $5.42 3/4 on Aug. 30. The corn market saw continued buying interest as U.S. Gulf of Mexico export capacity continued to come back online following serious damage from Hurricane Ida. Market action today also featured position evening and short covering ahead of tomorrow’s USDA quarterly Grain Stocks Report. The report is expected to show Sept. 1 U.S. corn stocks at 1.155 billion bu., which would be down 40% from a year ago would be and the smallest Sept. 1 stocks since 2013. Recent history shows USDA can have big misses from market expectations on their corn stocks forecasts, so don’t be surprised if the corn futures market sees a bigger price move Thursday, if USDA again surprises the trade. Traders will also examine the weekly USDA export sales report, which is expected to show U.S. corn sales of 400,000 to 900,000 MT in the 2021-22 marketing year.

Soybeans: November soybean futures climbed 6 3/4 cents to $12.83 3/4 per bushel. December soymeal futures rose $1.70 to $341.20 per ton and December soyoil rose 37 points to 57.83 cents per pound. Reports of a reduction in estimated of Brazilian soybean exports in September helped lift soybean futures overnight. Brazil’s grain export association, known as ANEC, said it expects that country’s September soybean exports to reach 4.735 million metric tons (MMT), a 6.1% decline from its previous forecast. That implies a bit more room for U.S. beans in the international marketplace. There was talk U.S. Gulf export facilities are being repaired at an accelerated pace, another supportive factor for the soy complex. USDA’s quarterly Grain Stocks report tomorrow is expected to show U.S. soybean supplies as of Sept. 1 at about 174 million bu., a 67% drop from the year-earlier date and the smallest late-summer stocks figure since 2014.

Wheat: December SRW wheat futures rose 3 3/4 cents to $7.10 1/4 a bushel and December HRW futures rose 6 3/4 cents to $7.11 3/4. December spring wheat fell 3 3/4 cents to $9.03 1/2. Winter wheat futures followed corn and soybeans higher as traders prepared for tomorrow’s USDA quarterly Grain Stocks report and Small Grains Summary. USDA is expected to peg U.S. wheat supplies as of Sept. 1 at 1.852 billion bu., down 14% from last year and the smallest number for that date since 2007. Also, USDA is expected to trim its final wheat crop estimate by 17 million bu. from the August forecast, based on a Reuters survey. The winter wheat crop estimate is expected to be a little bigger, while the spring wheat crop is anticipated to be lower. We expect USDA to cut spring wheat harvested acres more than most analysts, which would pull down the spring wheat and total wheat crop estimates more than the average pre-report forecasts imply. We are also looking for Sept. 1 wheat stocks to come in smaller than traders anticipate on average. While first-quarter exports were slowed, wheat feed use was high due to tight and out of position corn supplies for feedlots in the Plains.

Cotton: December cotton futures surged 191 points, or 1.9%, to $1.0194 a pound, the sixth consecutive daily increase. October futures rose 303 points to $1.0394, the highest settlement for a nearby contract since the market topped $1.04 in October 2011. Cotton futures soared to the highest levels in nearly a decade, extending a week-long 13% rally, on expectations for strong global demand and concern over potential weather problems in key U.S. crop regions. Strength in U.S. stocks contributed to the bullish commodity market backdrop. Rains in West Texas and U.S. Delta cotton areas and an outlook for more rainfall stirred concern over harvest progress and crop quality. “Frequent rain will fall through the next week in the Delta, stalling fieldwork and raising concerns over cotton quality,” World Weather Inc. said in a report. Tomorrow’s weekly USDA export sales report will indicate whether recent export demand will be sustained. Last week, USDA reported net weekly U.S. cotton sales of 345,400 running bales for 2021-22, up 21% from the previous week and up 27% from the previous four-week average.

Cattle: December live cattle fell 45 cents to $127.05 per hundredweight, the contract’s lowest closing price since $125.575 on May 4. November feeder cattle fell $1.775 to $155.275, the lowest settlement since mid-June. Futures sustained a weak tone as boxed beef prices extended a month-long slump and USDA’s latest Cattle on Feed report showed an unexpected increase in feedlot placements. Ongoing wholesale weakness suggests high retail beef prices may be pushing some consumers toward cheaper chicken or pork. Choice cutout values fell $2.97 today to an average of $297.33, the lowest since $296.26 on Aug. 6, USDA data showed. Movement totaled about 158 loads. On cash cattle markets, trade around $124 was reported in southern markets, following light tests earlier in the week at $122 to $123 in Iowa, Nebraska and Kansas. Meatpackers slaughtered an estimated 352,000 head of cattle the first three days this week, down 3.0% from the same period last week and down 1.1% from the same period in 2020, a USDA report showed. Also today, the U.S. dollar index rallied to an 11-month high, a potentially bearish signal for cattle because a stronger dollar makes U.S. commodities more expensive for foreign buyers.

Hogs: December lean hogs rose 2.5 cents to $83.60 per hundredweight, the highest closing price since $84.25 on Aug. 3. October and other contracts finished slightly lower. December futures extended this week’s gains amid beliefs the market is poised for a seasonal upturn, boosted by strength in wholesale pork. Carcass cutout values surged $6.99 to $115.11, the highest average price since $116.59 on Aug. 27. The increase was fueled by a gain of nearly $31 in hams. Carcasses averaged $74.51 on national direct markets, down 13 cents on the day. The recent upturn in both cash hog and wholesale pork values strongly suggests the traditional early-autumn bounce in the hog and pork sector will continue into mid-October. Given the nearby contract’s October 14 expiration, history suggests the October futures discount to the index isn’t warranted. The December contract is still trading at a sizeable discount to spot values, indicating the industry still expects typical seasonal weakness to as the calendar year ends.