After the Bell: Corn, Soy Retreat Ahead of USDA Planting, Stocks Reports Wednesday

Posted on Mon, 03/29/2021 - 14:29

Corn: Old-crop corn futures finished midrange with losses of 4 1/2 to 5 3/4 cents. New-crop December futures ended low-range and down 5 1/4 cents for the day.  Buyer interest was limited in the corn market today as traders didn’t want to add new long positions ahead of USDA’s key prospective plantings and March 1 stocks on Wednesday. There’s a lot of anxiety over the report data, especially March 1 corn stocks. Analysts have widely missed forecasts of quarterly corn stocks for years, and USDA has made major revisions to previous quarters the past two reports. Funds lightened their net length in a continuation of such action from late last week after CFTC data showed they mildly built long positions into March 23. Another day of position evening is likely on Tuesday.  

Soybeans: May beans fell 7 1/2 cents to $13.93 and November was down 2 3/4 cents to $12.04 1/2. May meal fell $5.90 to $398.10 and May soyoil was 48 points to 52.96 cents.  Soybeans opened steady to firm overnight and retreated into midsession on talk of Brazilian bean and Argentine soyoil imports, good weather in South America for harvest and weaker Chinese prices. Rising tensions with China are raising demand concerns. Traders are uncertain the USDA data this week will provide much fresh market direction, but they expect the agency to confirm the tighter balance sheets. A stronger dollar this month is curbing speculative interest in commodities as a hedge against inflation. Much of the selling was tied to funds liquidating longs ahead of USDA’s planting intentions and quarterly stocks reports on Wednesday morning.   

Wheat: May SRW wheat closed up 3 1/2 cents at $6.16 3/4 today. Prices closed nearer the session high today and hit a three-month low early on. May HRW wheat closed up 1 1/4 cents today at $5.69 1/2. Prices closed nearer the session high today and hit a 3.5-month low. Spring wheat futures closed about 3 cents lower. Winter wheat crop conditions across much of the Northern Hemisphere are improving and limiting buying interest in futures. Some planting will begin for early-season crops in the northern Plains and Canada’s Prairies, but only if significant rain falls. That remains questionable since the advertised event is a week away for the northern Plains.  Warming is needed in Canada to raise soil temperatures.  Limited winterkill has been observed in Russia, Europe and China, with a mostly good-looking India crop seen.   

Cotton: May cotton futures rose 11 points today to close at 80.49 cents and December futures lost 9 points at 78.65 cents. Prices closed near mid-range Monday. The recent rally in the U.S. dollar index that hit a 4.5-month high today, the slide in crude oil prices and Chinese anger over banned Xinjiang cotton have caused the cotton futures market bulls to become very cautious. There has been talk mills took advantage of the recent price weakness to fix on-call sales and buy cotton for delivery for several months. Look for more quiet trading on Tuesday, ahead of Wednesday’s USDA planting intentions report.  

Hogs: Futures were lower but near midrange at the close. April futures fell 42.5 cents to $100.375 and June slumped 37.5 cents to $105.225. USDA’s Quarterly Hogs & Pigs Report led to another round of new contract highs Friday and today longs are cashing profits ahead of the quarter’s end on Wednesday. But the recent acceleration to near historical highs means the rally may be nearing an end, despite seasonal trends supporting firmer prices into May. The market has been driven by the stronger domestic and export demand this year and the smaller U.S. inventory should keep futures firm for the next several weeks.Cash hogs were down an average of 57 cents at direct markets Monday. Pork cutout values continued to push higher, rising $3.95 at midday.  

Cattle: Live cattle futures settled high-range but off session highs with gains of 60 cents to 87 ½ cents. June and August futures hit new contract highs today. Feeder cattle rallied to new contract highs and settled up $1.15 to $2.325, with the May contract leading gains. Follow-through buying bolstered the live and feeder cattle markets after the markets posted technically bullish weekly high closes Friday. Traders were encouraged by a long-anticipated rise in cash prices last week that generated an average price of $115.59, up $1.36 from the week prior. That marks the highest cash price since last May.  Nearby feeder cattle futures are trading at an even wider premium to the feeder cattle cash index. Feeder steers traded $2 to $4 higher at an Oklahoma City auction today, amid good demand.