After the Bell: Corn, Beans Limit Up After USDA Reports

Posted on Wed, 03/31/2021 - 15:14

Corn: Corn futures prices closed up the 25-cent daily trading limit today. May futures closed at $5.64 1/4 and December futures at $4.77 1/2. May futures also registered a contract-high close and a technically bullish monthly and quarterly high close today. Daily trading limits expand to 40 cents for corn on Thursday. The corn market bulls needed a shot of bullish news and they got that and then some today. The USDA Prospective Plantings Report showed U.S. corn planted acres as 91.144 million, well below the average trade expectation of 93.208 million acres. That compares to 90.819 mil. acres planted in 2020. Given strong new-crop prices, we anticipate corn acres will increase from USDA’s March intentions, especially if spring weather is favorable for planting. Meantime, the USDA Quarterly Grain Stocks Report showed corn supplies at 7.701 billion bu., whereas traders expected 7.767 billion bushels. That’s down more than 250 million bu. from year-ago.  

Soybeans: Soybean futures had a strong bullish reaction to USDA’s reports, finishing up the 70-cent daily trading limit. Soymeal futures finished sharply higher to up the $25 daily limit. Soyoil futures ended sharply higher to up their 250 point daily limit. Trading limits expand to $1.05 for soybeans, $40 for soymeal and 400 points for soyoil during Thursday’s session, which is the last trading day for the week since markets are closed Friday. USDA’s March soybean planting intentions came in far short of what traders expected – and frankly what is needed to ease supply tightness. USDA estimates farmers intend to plant 87.6 million acres to soybeans this year. While that would be up 4.5 million acres from last year, the highest since 89.2 million acres in 2018 and the third highest on record, it was 2.4 million acres lower than traders anticipated. Obviously, more acres and/or less use would be needed as there is no margin for a production hiccup.  

Wheat: May SRW futures rose 16 3/4 cents to $6.18, May HRW was up 17 1/4 cents to $5.75 3/4 and May spring wheat futures gained 9 cents to $6.10 3/4. Wheat futures followed limit-bid corn and soybean futures to the upside on speculation feed demand will increase this summer both here at home and around the globe. There was some talk of SRW wheat sales increasing to Southeast hog and poultry feeders.  It also could lead to fewer spring wheat plantings. Prices also found support from a flurry of international tenders. The weather conditions are shifting to warmer and drier and that may provide additional support if sustained into May. Farmers told USDA they intend to plant 510,000 fewer acres to spring wheat this year, though that would be around 100,000 acres more than traders anticipated and our survey indicated.   

Cotton: May cotton rose 24 points to 80.88 cents and December rallied 118 points to 80.10 cents.  Cotton futures reversed earlier steep declines, closing higher. Cotton largely followed the limit-up gains in corn and soybeans despite a lack of fresh bullish news in today’s USDA prospective plantings report. The grain market rallies may lead to final cotton plantings falling below today’s intentions. Cotton plantings are expected to be down just a tick from last year and 131,000 acres higher than pre-report expectations. Cotton acreage intentions came in 164,000 acres fewer than our survey indicated. Cotton acres are expected to drop 18,000 acres in Texas to 6.82 million acres. Cotton plantings are expected to rise 10,000 acres in Georgia to 1.2 million acres.  

Hogs: June lean hogs closed down 72 1/2 cents at $105.30 today, with the rest of the market finishing narrowly mixed. Most contracts settled high-range. Spot cash hog and pork product markets are beginning to weaken, putting some pressure on the futures’ premiums. Cash hog prices slipped another 37 cents this morning, on a national direct average. However, losses in futures were limited as the pork cutout value rose a solid $4.71 to $110.01 per cwt. on movement of 186.89 loads at midday today. Hams led the gainers. Today’s hog slaughter was estimated at 492,000 head compared to 486,000 last Wednesday and 476,000 head a year ago at this time. Futures’ premiums suggest that hog supplies are unlikely to rise above demand

Cattle: April cattle closed unchanged at $120.975 and June rose 67.5 cents to $122.90. May feeders fell $2.80 to $149.40.  Live cattle futures were quiet today, but closing higher in all contracts but April.  Feeder cattle futures tumbled sharply lower after today’s USDA planting intentions report showed farmers intend to plant fewer corn acres than anticipated by the trade.  The Fed Cattle Exchange auction reported a top trade at $118 this morning, up about $2 from last week and a positive support for cattle. Wholesale beef prices are rising quickly, up about $12 from a week ago. Choice rose 70 cents at midday and Select was up $1.63 on moderate sales. The rib and the loin primals are up sharply even from a week ago, $24, and $18, respectively. Beef trimmings are up almost $13 in the past week as processed meat companies change their formulation away from pork to cheaper beef.