PUBLISHED April 18, 2024
Rice
Old-crop rice futures have soared higher this week as traders worry about the supply of rice available. May has charted some extremely wide trading ranges and set a new eight-week high on Tuesday. A close above resistance at $18.50 could signal a retest of resistance at $19.00, with the next target the February high of $19.35½. September rice has broken out of the sideways trading pattern that has dominated the market for the past eight weeks. So far, resistance at $15.00 has capped the market. Support is mainly coming from concerns about the short-term supply of rice. The war in the Middle East is causing general concerns about global food security. Farmers are moving quickly to get the crop in. USDA says 46% of the Arkansas crop was in the ground as of April 14, significantly ahead of the five-year average of 17% planted. Nationwide, 44% of the crop is in the ground. Rain throughout the mid-south may have slowed progress this week but will give the rice in the ground a good start in many areas.
Cotton
Cotton farmers reported to USDA their intentions to plant 10.673 million acres this year. That’s down 13% from the 5-year average, but up 4% from last year. It’s also up from the National Cotton Council survey that was open during January and reported in February, that showed intentions for 9.8 million acres. Farmers in Arizona and Texas have begun planting, and 8% of the total U.S. crop is in the field. Significant rainfall through Texas and the Southern states could delay planting in the short-term but should provide sufficient moisture to get the crop off to a good start. New crop December futures have been trending lower but charted a bullish key reversal to begin the week. However, huge losses on Tuesday negated that chart signal with the market closing below previous support at 80 cents. The next level of support is 77 cents. Inflation has caused the dollar index to surge, and that is pressuring cotton prices. If worries about war in the Middle East escalating cause crude oil price to increase, that would be supportive as it makes competing synthetic fiber more expensive.
Corn
Corn futures continue to trend sideways to lower. New crop December charted a bullish reversal in late March, but there has been no follow through buying and resistance at $4.80 remains intact. The monthly WASDE report showed a small increase in demand leading to lower ending stocks of 2.122 billion bushels, up from 1.36 billion bushels for 2022/23. The first 2024/25 estimates will be released in May, but analysts aren’t expecting to see tighter supplies at this point. These large supplies are keeping a lid on prices and could continue to, unless there are production issues. Corn planting is just getting started, with 6% of the crop in the ground.
Soybeans
Soybean prices remain under pressure as the expectations for a huge crop continue to limit the upside. USDA reported planting intentions of 86.5 million acres of soybeans. Next month will mark the first supply/demand estimates for the 2024/25 crop, which could have major market implications. Demand is increasing, but not at the same pace as supplies. Domestic crush for biodiesel production is currently providing some support. November soybeans have resistance at the March high of $12.16.
Wheat
Wheat futures appear to have charted a bottom, with July building on support at $5.37 ½. However, the market has been capped by resistance at $5.90 and is consolidating between those points. The monthly WASDE lowered domestic use while supply and exports remained unchanged. That resulted in ending stocks raised by 25 million bushels. The season-average farm price was down 5 cents to $7.10.
Livestock, Poultry and Dairy
In the monthly WASDE, red meat and poultry production estimates were raised from last month. Beef production was raised on heavier expected weights and higher slaughter totals. Pork production was raised on higher slaughter totals as projected in the Quarterly Hogs and Pigs report that showed strong growth in pigs per litter. Broiler production was raised based upon production and hatchery data.
Beef and pork export projections were raised based on strong exports reported early in 2024. Broiler exports were lowered based upon recent trade data and expectations that higher prices could affect trade.
The milk production forecast for 2024 was lowered on slower expected growth in milk per cow. Fat basis exports were raised on strong international demand for butter and price competitiveness of U.S. cheese. Skim-solids basis exports were lowered as fewer expected shipments of lactose and whey products more than offset higher shipments of nonfat dry milk and cheese. Class III prices were lowered due to lower cheese and whey price forecasts. Class OV prices were raised due to higher butter prices. The all-milk price for 2024 was projected to be $20.90 per cwt.