Rice futures have been working higher thanks to a bullish Supply/Demand report this month. USDA cut the all-rice carryout estimate for 2022/23 by 8 million cwt to 28.1 million cwt. 6 million cwt was long-grain, while 2 million was medium/short-grain. The average on-farm price estimates were unchanged, with the long-grain price pegged at $16.90. Old crop futures remain at a large premium to new crop. July futures are building resistance at $17.50, with additional resistance at $18. September futures have resistance at $15.50 and $16, with support at $14.50. Farmers have made significant planting progress in the past week-total planted acres increased 13% from last week, with 51% of the crop now planted in the United States. This is 26% ahead of last year’s progress, and 14% ahead of the five-year average. In Arkansas, 51% of the crop has been planted, which is up from 33% last week and ahead of the five-year average of 32%.
Cotton futures have moved from setting new 6-week highs to 4-week lows in the past week. A lack of demand continues to plague the cotton market as export sales continue to lag. Planting has reached 12% completion, a 4% increase from last week and on par with last year’s progress. Futures now have support at the March low of 76.34¢ for July and 77.56¢ for December. Arkansas has planted only 5% of its cotton crop, but this is ahead of the five-year average of 1%. After last year’s generational drought, West Texas is forecasted to receive some rain.
New-crop corn futures are trading at 12-month lows as farmers make good progress with this year’s crop. 14% of the crop is already in the ground, up from 8% last week and 7% at this time last year. The planting process is currently 3% ahead of the five-year average of 11%. Looking ahead corn planting progress is likely to slow down as more rain is expected in the Midwest. However, there is still plenty of time to get the crop in the ground. If conditions remain favorable, we could see more acres shift out of soybeans and cotton and into corn. Expect prices to continue to move lower if that occurs.
New-crop soybean futures are locked in a downtrend. Brazil is dominating export markets for the time being. Disappointing U.S. export movement is resulting in sales falling even further behind the pace needed to meet the USDA export forecast of 2.015 billion bushels. Soybean farmers are making good progress with the crop, with 9% of the planting completed for 2023. That’s an increase of 5% from last week and in line with the five-year average. In Arkansas, 34% of soybean planting has been completed, which is 23% higher than last year and 19% higher than the five-year average of 15%. Just like corn, planting progress is weighing on soybean prices. However, the record-setting Brazilian crop is more to blame. This Brazilian crop could affect the soybeans currently in storage.
Chicago wheat futures are locked in a downtrend. Demand for U.S. wheat is in the doldrums, with Russia dominating the market. USDA is reporting 57% of the Arkansas wheat crop is in good to excellent shape while only 5% is very poor to poor. Winter wheat ratings for the U.S. dropped to their lowest figure on record on Monday’s Crop Progress report. Good to excellent ratings fell 1% from last week to 26%.
Hog futures continue to trade near contract low levels. Both cash hog prices and wholesale pork prices are weak, and it is impacting futures markets. Wholesale pork prices are lagging significantly behind values this time last year. The composite cutout value is down 28% and belly cutout values are over 50% below last year. In the recent USDA Cold Storage report, pork belly stocks in cold storage are up 35% from a year ago and are at near 3-year highs. The most active June contract is establishing support near $84.65. Resistance begins at $90.
The rally in cattle futures has stumbled as the June contract charted a downward key reversal last week. Follow-through weakness has been limited, but the chart looks like a top has been confirmed. The April 1 cattle on feed report added to the negative undertone. The total inventory was 4% below 2022, but that total was above industry expectations. March placements totaled 1.99 million head, down 1% from last year, but again, above industry expectations.