After the Bell | August 24, 2022
Corn: Corn futures ended mixed, with nearby contracts firmer and deferred contracts lower. December futures rose 2 cents to $6.57 1/4, the contract’s highest closing price since June 28 but down nearly 14 cents from the high. December corn rose a sixth consecutive session amid ongoing concern dry conditions in key parts of the Midwest will curb production potential. Results from day 2 of the Pro Farmer Midwest Crop Tour Tuesday suggested Nebraska and Indiana yields will fall short of last year’s levels.
Scouts determined an average corn yield of 158.53 bu. per acre in Nebraska, down from both last year’s 182.35 bu. per acre estimate and the three-year Tour average of 176.68 bu. per acre. In Indiana, samples yielded an average corn yield of 177.85 bu. per acre, down from both 193.48 bu. per acre in 2021 and the three-year Tour average of 178.26 bu. per acre. However, reports from Illinois and Iowa earlier today indicated crops are faring better, which may have contributed to profit-taking pressure that cut futures gains. Day 3 estimates will be released at 8 p.m. CT.
USDA’s weekly export sales report Thursday is expected to show net U.S. 2022-23 corn sales for the week ended Aug. 18 at 500,000 to 800,000 MT, compared to 750,000 MT the previous week.
Soybeans: November soybeans fell 4 cents to $14.57 after earlier rising to $14.84 1/2. September soymeal fell 80 cents to $467.70. September soyoil fell 82 points to 68.77 cents. November soybeans faded under profit-taking after an early climb near a four-week high, possibly reflecting Crop Tour reports showing stronger crops in Illinois and Iowa compared with neighboring states. Results from day 2 of the Pro Farmer Crop Tour Tuesday suggested soybean yields in Nebraska and Indiana may trail last year’s. In Nebraska, soybean pod counts in a 3’x3’ square came in at 1,063.72, down from both 1,226.43 in 2021 and the three-year Tour average of 1,245.06. In Indiana, soybean pod counts in a 3’x3’ square totaled 1,165.97, down from 1,239.72 in 2021 but above the three-year average of 1,148,26. Scouts noted extremely dry conditions that could harm yield prospects.
USDA’s weekly export sales report Thursday is expected to show net U.S. 2022-23 soybean sales for the week ended Aug. 18 at 500,000 to 1.20 MMT, compared to 1.303 MMT the previous week, which was the largest weekly total since the end of March.
Wheat: December SRW wheat rose 12 3/4 cents at $8.13 1/4. December HRW wheat gained 14 1/4 cents at $8.93 1/4 and hit a three-week high. December spring wheat futures climbed $8.00 to $9.20. Winter wheat continued to rebound from last week’s sell-off with help from short covering, though weakness in corn and soybeans today could limit further wheat upside. December SRW and HRW contracts face stiff chart resistance that could cap rallies, and a resurgent U.S. dollar could also stem gains. World Weather said crop maturation and harvest progress “should advance well. Cooling in early September will be welcome, although there may not be much rain for the region.” Meantime, winter wheat planting will begin in the southwestern Plains in early September and “recent rain and expected in the coming week will be ideal in supporting” planting, World Weather said. USDA’s weekly export sales report Thursday is expected to show U.S. wheat sales of 200,000 to 500,000 MT for the week ended Aug. 18.
Cotton: December cotton rose 184 points at 114.07 cents. The cotton market rebounded at mid-week on some chart-based speculative buying as a classic bull flag pattern forms on the daily bar chart. Rallying crude oil futures also added support. Also, traders are still assessing recent Farm Service Administration acreage data. Based on those numbers, we believe there will be 7.9 million U.S. cotton acres harvested and production will within a range of 13.5-13.7 million bales. Weather in U.S. cotton country still leans slightly bearish. World Weather. reported additional rain is expected in the Blacklands, Coastal Bend, and south Texas into Friday, while western Texas and southwestern Oklahoma are mostly dry before showers and thunderstorms return to the entire region Saturday through Thursday of next week. “The rain’s impact on cotton will be similar across the southern Plains, with the moisture coming too late for much of the crop while some cotton will benefit from the moisture.”
Cattle: October live cattle fell 82.5 cents to $143.775, the lowest closing price since Aug. 9. September feeders rose 57.5 cents to $183.025. Live cattle fell to two-week lows on wholesale price weakness and mixed signals from the cash market. Packers are likely hoping wholesale beef weakness will translate into lower feedlot asking prices. But cash trading patterns appear different, with last week’s early trade coming in the higher northern markets and this week’s early action occurring in the south. For example, Texas and Oklahoma markets averaged around $141.91 so far this week, versus $141.55 last week. Iowa-southern Minnesota trading averaged $148.04 Monday and Tuesday, versus $147.21 a week earlier. That means traders favoring the short side may be surprised by late-week cash firmness.
Hogs: October lean hogs fell $2.525 to $90.375, the contract’s lowest closing price since July 5. Hog futures extended a recent slump on expectations for further cash weakness. Pork cutout values fell another $2.09 today to $102.99, a three-month low fueled partly by a decline of over $6 in bellies. Movement was a strong 305.5 loads. The CME lean hog index fell 80 cents today to $119.18, a one-month low, and is expected to plunge to $118.00 tomorrow.
