After the Bell: Corn New Highs, While Soybeans Consolidate Gains in Active Trade

Posted on Wed, 01/13/2021 - 14:44

Corn: March, May and July corn futures finished low-range but still posted gains of 7 1/4 to 8 3/4 cents and finished just above opening levels. New-crop December futures dropped 4 1/4 cents. Corn futures gapped higher overnight following Tuesday’s limit-up performance and extended sharply to the upside but then pulled back to from the highs during daytime trade. Bears may try to argue the move well off session highs signals short-term exhaustion. But finishing higher in old-crop contracts and above the opening levels suggests bulls aren’t done yet. USDA’s Tuesday report data was surprisingly bullish for corn, though speculative money flow will remain the key to near-term price performance as any fundamental news. Traders expect corn export sales for the week ended Jan. 7 to total between 700,000 MT and 1.2 MMT tomorrow morning.  

Soybeans: Futures reversed overnight gains and closed near session lows. March beans were down 12 at $14.06 1/4 with November down 1/2 cent at $11.76. March meal was down $7.90 to $457.30 and March soyoil down 45 points to 42.18 cents. Profit-taking emerged today after overnight strength on speculation that the tidal wave of bullish news yesterday from USDA is unlikely to be repeated in the near term. That is especially true as South America weather leans negative with forecasts for 85% of the Brazilian belt to get rain the next five days, reducing the dryness areas to less than 15%. Rains this week in Argentina and more in the forecast in the 8- to 14-day outlook also hint at a less threatening outlook. The focus with improving weather in South America will turn the willingness of end-users to extend coverage on setbacks and how funds managed a near record long position.   

Wheat: SRW wheat futures rose to new highs, closing lower with HRW futures holding onto small gains. March SRW futures fell 4 1/2 cents to $6.60 1/2 and March HRW futures gained 3 1/4 cents to $6.25 3/4. March spring wheat was up 6 cents to $6.26 3/4.  Mixed finishes today on profit taking and unwinding of spreads.  USDA wheat supply and demand changes were positive yesterday. The agency cut its U.S. ending stocks forecast to the smallest in six years, albeit at more than ample levels. However, USDA also said farmers planted about 1.6 million more acres of winter wheat last fall, the most in three years. USDA’s global ending stocks forecast was cut to 313.2 MMT and global consumption increased to 759.5 MMT. Global inventories are still projected at a record.  

Cotton: March cotton futures prices closed  down 78 points at 80.92 cents and near the session low. Prices hit a contract and nearly 2.5-year high earlier today. Some routine profit taking was featured in the cotton futures market today. Prices shot higher Tuesday after a bullish USDA report that showed the U.S. crop was cut 710,000 bales more than expected and ending stocks dropped 800,000 bales more than anticipated.  With the soybean and corn markets trying to buy acres cotton must actively participate or it is at risk of losing acres. With old-crop ending stocks projected at 4.6 million bales, some loss of cotton acres wouldn’t be a concern, but the cotton market can’t give up a lot of acres with warm, dry conditions associated with the La Nina pattern expected to extend through at least spring.  

Hogs: Lean hog futures settled split, with February through May futures 5 cents to $1.75 lower and deferred months settling 20 to 92 1/2 cents higher. The front-month gapped lower on the open and settled low-range, but deferred contracts settled mid- to high-range, with summer months registering new contract highs.  February lean hogs extended the downtrend as traders took note of futures’ wide premium to the CME lean hog index. After today’s heavy losses, the contract is trading “just” $2.36 above the index, which has climbed in recent weeks. Pressure has also stemmed from rising hog weights in the key Iowa/southern Minnesota market.  But processors have been running aggressive slaughter schedules with margins  strong near $37 a head, according to HedgersEdge.com.  

Cattle: February live cattle futures prices closed down $0.225 at $112.25 today and April live cattle fell $0.175 at $117.475. March feeder cattle futures gained $0.35 at $134.325 after hitting a seven-week low early on. Live cattle futures are seeing routine profit taking from recent gains, while the feeder cattle futures market tries to recover from recent selling pressure tied to the strong gains in the corn and soybean meal markets. Traders are looking for this week’s negotiated cash cattle price to be steady to weaker than last week.   Slaughter margins are the smallest since March and packers will continue to leverage their committed cattle inventory against the cash market. Choice boxed beef climbed another $0.94 and Select gained $1.16, with movement at 72 loads at midday.