After the Bell | February 28, 2022
Corn: May corn futures rose the daily 35-cent trading limit to end at $6.90 3/4. December futures rose 27 1/2 cents to $6.07 1/4. The daily trading limit remains at 35 cents for Tuesday. Corn futures rebounded from Friday’s sharp declines as wheat rallied on concerns Russia’s war with Ukraine may disrupt the global grain trade, including exports out of the Black Sea region. Combined, Russia and Ukraine account for nearly one-fifth of world corn exports. Corn futures will likely follow the lead of wheat this week and will also be influenced by speculative money flow, with expectations for drought-driven crop shortfalls in South America likely factored into current prices levels.
Soybeans: May soybeans surged 52 1/2 cents to $16.36 3/4, while November futures rose 20 3/4 cents to $14.35 3/4. May soymeal firmed $3.60 to $446.30. May soyoil jumped 359 points to 72.52 cents. Increased anxiety over the Russia/Ukraine conflict fueled an active wave of buyer interest in the soy complex. Money flow and emotions tied to the war will continue to be the primary price driver. Soyoil demand will be watched closely as Ukraine in the world’s leading exporter of sunseed oils and Ukrainian ports will reportedly remain shut until the Russian invasion ends.
Wheat: May SRW wheat soared 74 1/4 cents to $9.34, while March futures jumped 85 cents to $9.28, the highest close for a nearby contract since $9.43 1/4 in July 2012. May HRW wheat rose 62 cents to $9.53. May spring wheat futures rose 33 3/4 cents to $9.94. Wheat futures bounced back strongly after sharply lower to limit-down losses Friday. However, extreme price volatility the past few sessions may signal a final phase of the major bull market run. Look for wheat futures to continue to react to news headlines from the Russia/Ukraine war. Markets were spooked following Russia’s weekend announcement that its nuclear forces have been put on high alert. Concerns over disrupted grain shipments out of Ukraine and Russia are boosting futures prices.
Cotton: May cotton futures rose 49 points to 119.12 cents per pound, while December futures gained 3 points to 100.36 cents. Cotton futures rose modestly behind a pullback in U.S. dollar strength and a rally near $100 per barrel in Nymex crude oil futures, as traders kept a close eye on the intensifying conflict between Russia and Ukraine. Cotton is not a major factor in the region of conflict, but Russia and Ukraine combined account for nearly 30% of global wheat exports. The U.S. dollar index rose near the 20-month highs reached late last week but faded during the U.S. trading session, encouraging buyers in cotton.
Cattle: April live cattle fell 50 cents to $141.425, the contract’s lowest close since $140.10 on Jan. 25. April feeder cattle tumbled $2.75 to $162.00, the lowest close since Nov. 12. Feeder cattle futures faced heavy selling from sharp gains in corn. March feeders are trading below the cash market, but that isn’t likely to deter near-term selling if corn continues to strengthen. Live cattle futures failed to find sustained buying with feeders under pressure. Last Friday’s USDA Cattle on Feed Report had little price impact. Focus turns to cash cattle trade, which has been strengthening for the past month. Active cash trade is at least a couple days off, especially if packers aren’t willing to raise cash bids. Last week’s average price was $143.22, up 86 cents from the previous week and the fourth consecutive weekly gain. Choice beef cutout values fell 76 cents to an 11-month low at $257.51. Movement was light at 85 loads.
Hogs: April lean hogs futures fell 17.5 cents at $103.50, the contract’s lowest settlement since $102.325 on Feb. 14. Lean hog futures fell sharply for a fourth straight session amid growing beliefs the market established a near-term peak with the contract highs posted the middle of last week. A downdraft in cattle futures today added spillover pressure. Cash hog market fundamentals remain solid, with the CME lean hog index up 36 cents today and projected to rise another 69 cents tomorrow to $99.09, near a six-month high. Pork cutout values fell $1.05 today to $112.27, led by a drop of nearly $12 in primal hams. Movement totaled 274 loads.
