After the Bell: Choppy, Quiet Grain Trade Waiting on USDA's Report on April 9

Posted on Tue, 04/06/2021 - 14:35

Corn: May corn futures closed up 1 cent at $5.54 1/4 today and December futures lost 5 1/4 cents at $4.83 1/4. Prices closed near their daily lows. The new-crop corn futures saw pressure today as early U.S. planting chances still look solid with dry conditions for most and a generally favorable forecast into mid-April. Forecast maps for the U.S. do bring in plenty of rain chances for the Midwest in the next ten days, to slow very early progress for corn planting, though overall wetness doesn’t appear to be an issue beyond April 15. Corn planting was estimated to be 2% completed as of Sunday, in line with the historical average.  Friday’s monthly USDA supply and demand report is likely to show USDA cutting its old-crop corn carryover forecast about 120 million bu. from 1.502 billion bu. estimated a month earlier.

Soybeans: Soybean futures finished in the middle to lower end of today’s ranges with gains of 2 1/2 to 6 cents through the September contract. New-crop November futures ended 2 1/4 cents higher. Meal futures closed 40 cents higher to $3.50 lower through the December contract. Soyoil firmed 60 to 111 points through the December contract. Soybeans followed the lead of soyoil higher today. But much like yesterday, buyer interest faded late and futures came well off their highs into the close. The lack of sustained buyer interest the first two days this week signals bulls are seeking some fresh bullish news. Much of the price action the next two days will likely be positioning ahead of USDA’s Supply & Demand Report on Friday. Traders aren’t expecting any significant changes to USDA’s old-crop soybean ending stocks forecast this month, though there could be some movement within the usage categories.  

Wheat: May SRW wheat closed down 2 1/2 cents at $6.15 1/2 today. Prices closed nearer the session low today. May HRW wheat closed down 7 cents today at $5.55 1/2.  Prices closed at a four-month-low close. Spring wheat futures closed about 3 cents lower today. The wheat market bears are pressing their case a bit more this week, as the near-term technicals have turned negative with both SRW and HRW futures trending lower on the daily charts the past month. USDA reported Monday 53% of the U.S winter wheat crop was rated “good” and “excellent.” The surprise was not that 53% of the crop was rated in the top categories, but that 16% of the crop was rated “poor” and “very poor,” with nearly all of that wheat being HRW located in the Plains.  

Cotton: Futures end higher but near mid-range. May cotton rose 134 points to 79.22 cents and December gained 154 points to 79.41 cents. Cotton moved sharply higher after the steep drop in March pushed prices down to key support and encouraged short covering. There was little overhead selling interest on the rally this morning, allowing prices to surge in early trading before paring gains into the close. The CFTC Commitments of Traders report showed funds were net sellers of more than 5,000 contracts in the week ended March 30. Net-long positions fell to a five-month low of 54,472 contracts, down sharply from the peak of more than 74,500 net long five weeks earlier.  

Hogs: Lean hog futures saw two-sided trade today before settling high-range and up 2 ½ cents to $1.45 in all but the April contract. The front-month contract also finished high range but with a 30-cent loss for the day. Lean hog futures have surged higher since December, with the market posting a series of new contract highs in recent days, including yesterday. Today, the market saw some profit-taking, with a pullback in the pork cutout value and national cash hog prices to start the week adding incentive to that end. This morning, the pork cutout value rose 53 cents and, even more impressive, movement picked up to 234.72 loads. That helped futures to a high-range finish. Packer profit margins remain in the black at $8.15 a head, according to   April. You should also have 50% of meal needs for May through August covered in the cash market.

Cattle: Firmer with new highs in several live cattle contracts. June cattle rose 20 cents to $124.625 and August was up 7.5 cents to $123.425. May feeders closed unchanged at $151.775. Cash cattle bids are firming with a $121 bid and trade in Kansas by regional packers today bodes well for stronger cash prices this week with prices finally rising above the $120 level for the first time in a year.  Boxed beef values are strong, supported by terrific demand and also helped by high pork prices. At mid-morning today, the Choice cutout rose another $3.30 to almost $262, the highest price since the shortage created during the pandemic production problems. Steaks and trimmings are leading.