After the Bell: Mixed Corn, Soybean Closes With New-Crop Taking Leadership

Posted on Thu, 04/01/2021 - 14:37

Corn: Corn futures finished widely mixed today amid bull spread unwinding. May and July corn ended 4 1/2 and 2 1/4 cents lower, respectively, while new-crop December corn firmed 7 cents. For the week, May corn futures firmed 7 1/4 cents to $5.59 3/4 but ended 25 1/4 cents off the high. December corn futures rallied 18 cents to $4.84 1/2, though that was 8 1/2 cents off today’s high for the week.  Price action the final two days this week signals traders are concerned about March planting intentions not being enough to fix the tightening supply situation. With that in mind, downside risk is likely limited for new-crop corn futures. But today’s price action also suggests the bullish old-crop situation is already priced in the market. Bulls need some fresh bullish fodder in the April 9 Supply & Demand Report to push old-crop contracts to new highs and spark a breakout from the extended sideways trading range.   

Soybeans: May beans ended down 34 3/4 cents to $14.02 but up 1 1/2 cents for the week. November beans gained 7 1/2 cents to $12.63 3/4 and up 56 1/2 cents this week. May meal gained $6.20 to $410.20 this week while May soyoil futures were down 35 points to 52.13 cents, a second straight weekly decline after hitting new contract highs last week. Old-crop soybeans retreated but new-crop November extended gains today as traders digested the USDA data Wednesday showing farmers plan to sow fewer-than-expected acres. A slower weekly export pace also contributed to the weakness this morning after prices jumped sharply higher overnight after both beans and meal closed limit up on Wednesday. The failure of May soybeans to follow November into new highs was a technical sell signal given the bullish acreage news and selling snowballed through the session with prices closing near session lows. Some easing in Gulf cash premiums also added to caution despite the record pace of soybean export shipments and crushings already this marketing year.  

Wheat: Wheat futures took their cue from corn and soybeans for a second day. Wheat rallied early in the overnight session but turned down when buying in the corn and bean markets faltered. HRS wheat futures posted losses of 11 ¼ to 12 ¼ cents today. HRW finished 9 ½ to 10 ¾ cents lower and SRW wheat posted losses of roughly 5 to 7 cents. After a wide-ranging week of trade, May SRW wheat futures ended just 2 ¼ cents lower for the week.  Next week will be another busy one. On Monday, USDA will release its first national Crop Progress and Condition rating update of the year. A number of state offices updated their ratings last week, and a comparison to USDA’s last Nov. 30 shows a wide mix of improvement and degradation. But top-producing Kansas has seen a 17-point jump in the amount of crop rated “good” to “excellent” over that timeframe. USDA’s balance sheet update on April 9 will be another focus, though wheat may again take its cue from corn and soybeans.  

Cotton: May cotton closed down 293 points at 77.95 cents today. Prices closed near the session low today and hit a three-month-low. Prices also scored a bearish “outside day” down on the daily bar chart today. Serious near-term and some long-term technical damage has been inflicted in cotton recently to suggest a market top is in place. For the week, May cotton lost 243 points.  Look for follow-through selling pressure early next week following today’s bearish weekly low closes in cotton futures. The cotton market saw pressure today in part after USDA reported U.S. net cotton sales of 78,400 running bales (RB) for the 2020/2021 marketing year that were down 71 percent from the previous week and from the prior four-week average.  Tensions between the U.S. and China remain elevated.  

Hogs: April futures gained 72.5 cents to $101.775, capping a 97.5-cent weekly gain. June futures rallied $1.025 to $106.325 and up 72.5 cents this holiday-shortened week. Most contracts hit new highs this week. USDA reported pork export sales last week jumped 43% above the four-week average to 61,000 MT, a new high for the year. China bought nearly half of the total and that will provide fresh support to the trade to start April.  A wave of African swine fever outbreaks this year has wiped out at least 20% of the breeding herd in northern China, industry sources and analysts told Reuters, exceeding expected losses and raising fears about the potential for further impact in the south.  Packer profit margins have tightened over the past week, dropping to $7.25 per head from $14.45 the week prior.  

Cattle: June live cattle closed 35 cents lower at $122.55 today. Prices closed near the session low on mild profit taking after hitting a contract high in early trading. For the week, June cattle gained 77.5 cents. May feeder cattle futures closed down 17.5 cents at $149.225 today. Prices closed nearer the session low today and saw mild profit taking after hitting a contract high on Tuesday. For the week, May feeders fell 65 cents. It was another good week for the cattle market bulls, which should provide for some follow-through buying interest in cattle futures markets early next week. Cash cattle trade as of this writing remained slow on light demand. But sales were quoted as high as $118 in Nebraska or $1 to $3 higher for the week. In the Plains cattle markets had seen some light sales between $116 and $117. Boxed beef prices at noon today extended their impressive rallies.