After the Bell | February 8, 2022

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Corn: March corn futures fell 3 cents to $6.32 1/4 and near mid-range, while December futures rose 1 cent to $5.82. Routine profit-taking weighed on corn futures in consolidation trade ahead of USDA’s Supply and Demand update tomorrow. Losses in soybeans, soybean oil and crude oil futures contributed to pressure. USDA’s monthly supply and demand data tomorrow is expected to reflect crop losses in South America due to drought. USDA is expected to lower its Brazil corn crop estimate to 113.63 MMT from 115 MMT and its Argentina corn production forecast to 52.16 MMT from 54 MMT, according to a Reuters survey of analysts.

Soybeans: March soybeans fell 12 3/4 cents to $15.69. March soymeal rose $1.30 to $454.10, the highest close for a nearby contract since January 2021. March soybean oil fell 119 points to 63.35 cents. Soybean futures fell in a corrective pullback ahead of USDA’s Supply and Demand Report. USDA is expected to lower its projection for Brazilian soybean production to 133.65 MMT from 139 MMT, based on the Reuters survey. Argentina’s crop estimate is expected to be cut to 44.51 MMT from 46.5 MMT. USDA is also expected to report a tighter outlook for U.S. supplies. Ending U.S. soybean stocks for 2021-22 are expected to be lowered 40 million bu. to 310 million bu.

Wheat: March SRW wheat rose 10 cents to $7.78 3/4 and near the session high. March HRW wheat rose 9 1/2 cents to $8.01 1/4, also near the session high. Spring wheat futures rose 19 1/4 cents to $9.40 1/2. Wheat futures rose after Stats Canada reported a big drop in the country’s inventories at the end of 2021, fueling concern over tight global supplies of milling-quality wheat. Canada’s wheat stocks at the end of December totaled 15.6 MMT, down 38% from the same period in 2020 and nearly 2 MMT smaller than market expectations. The drop in stockpiles is mainly due to poor growing conditions in western Canada.

Cotton: March cotton rose 158 points to 127.15 cents per pound. May futures rose 104 points to 124.04. Cotton futures posted gains for the first day in the past three as traders evened positions ahead of tomorrow’s USDA Supply and Demand Report, which is expected to show a modest rise in 2021 U.S. cotton production and a small drop in U.S. exports. A Bloomberg survey indicates traders expect USDA to boost its U.S. production estimate to 17.65 million bales from 17.62 million bales. U.S. ending stocks for 2021-22 are seen rising to 3.29 million bales from 3.2 million bales and global ending stocks are expected to be trimmed to 84.95 million bales from 85.01 million bales.

Cattle: April live cattle fell 22.5 cents to $146.175, the lowest close in a week. March feeder cattle jumped $1.85 to $166.875. Nearby live cattle settled about $2.00 over last week’s five-area live steer average of $139.76, implying sustained cash market firmness over the next three weeks, though this week’s trade has yet to establish a firm direction. Meanwhile, the April contract’s premium of about $4.00 over February implies a normal seasonal advance over the next eight to 10 weeks and potentially a significant rise in wholesale beef values during that time frame. Choice cutout values fell $1.50 today to $277.46, a four-week low, but movement was strong at 180 loads.

Hogs: April lean hog futures rose $2.525 to $103.80 after posting a contract high at $104.675. February lean hogs rose $2.625 to $90.325, a four-month closing high. April hog futures posted fresh contract highs for the fifth day in the past six and deferred futures also notched contract highs continuing strength in cash fundamentals and a tight supply outlook. Today’s CME lean hog index rose $1.57 to $85.87, the highest since Oct. 19, and is expected to gain another 75 cents tomorrow. Wholesale pork prices also extended recent gains. Pork cutout values fell 90 cents today to $97.29. Movement was strong at about 348 loads.

 

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