After the Bell: Grains, Soy Surge to Cap Huge April Rallies; Hogs Rally

Posted on Fri, 04/30/2021 - 14:34

Corn: May corn futures prices rose 38 cents a bushel to close at $7.40 and hit fresh eight-year high. July corn futures rose its 25-cent daily trading limit to close at $6.73 1/4 to set a new contract high and also close at a technically bullish weekly and monthly high close. For the week, July corn gained 40 3/4 cents. The story of the corn market recently could be titled, “Into Thin Air.” That’s a good thing because rarely have corn prices ever been so high so early in the season. However, history also shows that corn prices this high generally do not stay that way for very long. During the month of April, nearby corn futures prices appreciated a whopping $1.74 3/4 a bushel. The cash corn market will continue to lead for in the near term. There were no deliveries against May futures on first notice day. Focus will be on U.S. planting progress next week and on weather conditions for Brazil’s second corn crop next week, with weather forecasts for Brazil calling for continued dry conditions for the next two weeks.  

Soybeans: Soybean futures faced pressure at times overnight and early this morning, but the market eventually reversed higher and settled near session highs with gains of 18 ¾ cents to 32 cents. Old-crop led gains and the July contract settled 18 ¼ cents higher for the week. Soymeal also reversed early losses to finish $2.80 to $3.40 higher through the August contract; deferred months posted losses of 40 cents to $1.00. Soyoil also finished the week and month on a strong note, settling 171 and 250 points higher.   Farmers likely made big strides planting soybeans over the past week, thanks to generally dry weather and warming temperatures. USDA will provide an update on planting progress Monday.  Record-tight U.S. ending stocks remind there is little room for error on the U.S. soybean crop, amplifying the odds for some volatile price moves if there are any weather threats.

Wheat: July soft red winter wheat futures closed the day up 5 3/4 cents at $7.34 3/4 and for the week gained a 22 1/2 cents. July hard red winter wheat futures rose 9 cents today at $7.03 1/2 and on the week gained 23 cents. July spring wheat futures rallied 38 1/4 cents this week to $7.63 3/4. Prices scored new contract and multi-year highs and when prices did back well off those highs the bulls were able to once again show resilience and stabilize the markets at higher levels. Spring wheat continues to lead higher on dry weather across the Northern Plains and Canadian Prairies. Canada reported total wheat planting intentions will fall 1.7 million acres from last year, of which spring wheat was down 1.6 million acres. Focus in the next few weeks will remain on weather conditions in the world’s main wheat-producing regions. Weather in May is key but slowing demand for U.S. wheat may limit market strength.  

Cotton: Futures rallied on the strong grain markets but closed mixed for the week. July cotton rose 154 points to 88.08 cents, paring its weekly decline to 72 points. December cotton gained 122 points to 85.06 cents on Friday, ending 13 points higher for the week. July futures rose 591 points in April while December gained 496 points this month. After trading both sides of unchanged Friday morning, the market quickly followed the sharp rallies in corn and soybeans to close higher.  Accumulated cotton sales and shipments reached 15.149 million bales as of April 22, the highest for the date since 2018. The five-year average is 13.056 million. Sales represent 96% of the USDA’s forecast for the marketing year versus a five-year average of 98%.  There are some worries about undelivered sales to China after President Joe Biden’s administration urged China to do more to respect the intellectual property of American companies, signaling the U.S. will maintain pressure applied under Donald Trump to crack down on commercial crimes ranging from intellectual property theft to counterfeiting and digital piracy.

Hogs: Futures have swung limit up to limit down to limit up to close this week. The increased volatility is usually seen at market extremes but making new highs in several contracts today eased those concerns. June futures rose the $3 limit to close at $109.725, up $4.00 this week and $4.425 in April. The CME Lean Hog Index rose $8.39 this month to the highest since October 2014. News remains bullish amid firm cash hog markets, but the pork cutout has turned not quite so firm thanks to weakness in bellies. But several other cuts rose to new highs on Friday and ignited fresh futures buying. The belly market needs to be watched as it may be a sign that restocking restaurants has been completed.  Packers were bidding up to move more numbers at the end of the week.  They are also worried about seasonally slower market-ready animals the next several months. National direct hog prices rose $3.76 higher Friday to a weighted average of $111.76. 

Cattle: June live cattle futures closed the day Friday up $0.525 at $116.575 and for the week gained 85 cents. May feeder cattle futures fell $2.25 today to close at $133.60 and on the week lost $4.075. It was a choppy trading week for the cattle futures markets. The bulls can argue they were able to stabilize prices after the major sell-off the two weeks prior. However, cattle futures markets may continue to struggle in the near term to confirm market bottoms. The bulls did get some good news today, as Choice boxed beef values climbed another $2.61 and Select rose $3.88 at noon. Both grades were up notably for the week. Movement this week has also been better than some expected, considering high prices. However, the cash cattle market needs to show more improvement to suggest futures and cash have bottomed out. Cattle traders will continue to look to the corn futures market next week. Cash corn prices above $7.00 a bushel this week will likely continue to be a negative anchor for cattle futures prices.