After the Bell | February 22, 2022

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Corn: March corn futures rallied 20 1/2 cents to $6.74 3/4, the highest closing price for a nearby contract since July. December futures rose 8 cents to $6.05 3/4. Corn futures extended last week’s gains as escalating prospects for war between Russia and Ukraine spurred a broad-based upswing in commodity markets. The likelihood of South American crop shortfalls also drove bullish sentiment. Crop Consultant Michael Cordonnier lowered his Argentina corn crop estimate by 1 MMT, to 49 MMT, after a week of dry weather across most of the country. Cordonnier left his Brazilian corn forecast unchanged at 112 MMT. Also today, USDA reported 1.578 MMT (62.1 million bu.) of U.S. corn inspected for export during the week ended Feb. 17, up from good sales of 1.456 MMT the previous reporting week.

Soybeans: March soybeans rose 33 1/2 cents to $16.35, the highest close for a nearby contract since $16.60 1/2 last May. March soymeal rose $5.80 to $453.70 and March soyoil rose 258 points to 70.15 cents. Fresh export business and expectations for crop shortfalls in South America contributed to soy complex strength. The tighter supply outlook has fueled a nearly month-long buying spree from China and others that extended into this week. Early today, USDA reported a daily sale of 132,000 MT of soybeans for delivery to China during the 2022-23 marketing year. Since Jan. 28, USDA has reported a combined 3.65 MMT of soybean sales to China or “unknown destinations.”

Wheat: May SRW wheat rose 48 1/2 cents to $8.52 1/2, the contract’s highest closing price since Nov. 24. May HRW wheat surged 47 cents to $8.87. May spring wheat gained 26 1/2 cents to $9.87 3/4. Wheat led grain and oilseed futures higher amid growing concern a war between Russia and Ukraine will disrupt the global grain trade. Ukraine shipped 42.5 MMT of grain so far in 2021-22, up 37% from the same stage last season, including 17.85 MMT of wheat and 18.68 MMT of corn, according to Ukraine agriculture ministry data. USDA reported 539,366 MT (19.8 million bu.) of wheat inspected for export during the week ended Feb. 17, up from 459,377 MT the previous week.

Cotton: March cotton futures led deferred contracts lower, falling 188 points to 121.11 cents per pound. Today was first-notice day for the March contract, which drove a comparatively large loss for the lead month versus deferred futures. Weakness in U.S. stocks weighed on cotton amid concern economic weakness could hurt consumer apparel demand. The geopolitical situation, especially Russia/Ukraine, will probably continue dominating the markets during the days ahead.

Cattle: April live cattle gained 15 cents to $146.025. March feeder futures tumbled $1.20 to $164.225. Live cattle gained spillover support as grain markets surged on worries over a Russian invasion of Ukraine, while feeder cattle fell as corn prices rallied. Monthly and seasonal patterns suggest grocers will not be very aggressive pursuing beef this week ahead of Ash Wednesday next week. Still, the cash market showed signs of continued strength, with a few head of cattle changing hands at $145.00 today, compared to last week's average of $142.36. Choice beef cutout values fell $2.07 to $262.02, a two-month low.

Hogs: April lean hog futures soared $2.675 to $112.075, the highest closing price for a nearby contract since mid-July. Hog futures rose for a sixth consecutive day behind robust cash fundamentals and broad-based strength in commodity markets. The CME lean hog index rose $1.89 to $97.12, the highest since Sept. 10, and the next reading is expected to gain another $1.04. Wholesale pork tumbled to end last week but remains up sharply from January lows, a reflection of improving demand and tighter supplies of market-ready hogs. Pork cutout values fell $1.33 today to an average of $108.76, led by a decline of over $6 in bellies. Movement totaled about 314 loads.

USDA’s monthly Cold Storage Report showed a smaller-than-normal build in frozen pork stockpiles during January and an increase in beef supplies, contrary to the typical small decline during the month. U.S. beef stocks as of Jan. 31 totaled 526.4 million lbs., up 7.1 million lbs. (1.4%) from the same date in 2021 but 14.9 million lbs. (2.9%) under the five-year average. Frozen pork inventories totaled 428.5 million lbs., down 29.0 million lbs. (6.3%) from year-ago levels and 121.7 million lbs. (22.1%) below the five-year average.

 

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