Last week, USDA released its first look at the 2023/2024 Supply/Demand balance sheet since the February outlook conference. The outlook for rice is for an 8% rise in domestic supplies due to a significant increase in acreage that more than offsets lower beginning stocks and smaller imports. All-rice production is forecasted to be up 20% from the previous year. Yields are also forecasted higher, up 204 lbs. per acre to 7,587 lbs. per acre from 2022. Total 2023/24 domestic and residual use is projected higher at 154 million cwt, which, if realized, would be the largest on record. Total exports are projected at 74 million cwt, reflecting larger supplies and reduced U.S. prices. The 2023/24 all-rice season-average farm price is projected lower than in 2022/23.
The weekly crop progress report shows that planting continues to outpace the 5-year average in most states. As of May 22, the Arkansas crop was 95% planted, and the U.S. total was 90%. Futures prices are under pressure, reflecting the relatively brisk pace of planting, higher acreage, and increased yield potential. September futures have resistance at $15.50, and support at the spike low of $14.51.
Despite a projected 2.5 million acre decrease in planted acres, the 2023/24 crop is expected to come in at 15.5 million bales, up about a million bales from 2022/23, after a year of record abandonment. Total supplies are expected to be up nearly 800,000 bales and beginning stocks are projected to be lower. Exports are projected to be up 900,000, and U.S. mill use is expected to rise 100,000 bales. Ending stocks for 2023/24 are pegged at 3.3 million bales, down 200,000 from the previous year. The 2023/24 season average farm price for upland cotton is projected lower from 2022/23.
Cotton farmers are mostly keeping pace with the 5-year average, and 45% of the crop is now in the ground. Arkansas farmers are 10% ahead of the average with 79% of the crop planted. Old-crop futures have been fairing much better than most of the grains, but July found resistance at 88¢ and that has put a halt to the upward momentum for now. Improving conditions in West Texas are potentially limiting the upside for new-crop futures. December has run into resistance at 84.5¢. Support begins at 79.5¢.
Higher supplies, crush, and ending stocks, and lower exports compared with 2022/23 was forecasted in the most recent outlook. The soybean crop is projected to be up 5% from last year’s crop, mainly from higher yields. Lower beginning stocks partly offset the increased production, forecasting supplies to be up 4% from 2022/23. The 2023/24 soybean crush is projected to be up 90 million bushels from the 2022/23 forecast due to favorable crush margins and strong demand for soybean oil as a biofuel feedstock. Soybean and product prices are all forecasted lower for 2023/24.
Planting progress continues to outpace the 5-year average for most of the U.S. with 66% planted. Arkansas is reporting 83% of the crop planted, compared to the 5-year average of 61%. Soybean futures continue to fall due to a few bearish fundamentals including a bearish weather forecast, weak demand and negative macros as Washington continues to try and come to an agreement on a debt ceiling deal. November 2023 has continued to move lower the past few weeks, dropping below $11.80, before finding support.
Larger production, great domestic use and exports, and higher ending stock were all reported for 2023/24. USDA estimates corn planted for the 2023/24 marketing year will be 92 million acres, up 4% from 2022/23. Farmers are expected to harvest 84.1 million acres in 2023, putting expected production at a record 15.3 billion bushels, up more than 10% from last year on both area and yield. With an increasing supply, ending stocks are up 805 million bushels from 2022/23. U.S. corn exports are forecasted to rise to 2.1 billion bushels, as lower prices support increases in global trade. The global coarse grain outlook is for record production and use, and larger ending stocks. All of this has moved the season-average farm price projection lower.
Corn planting continues to outpace the 5-year average by 6% at 81% completed. With little rain in the forecast, planting is expected to be raping up. Over the past few weeks September 2023 corn futures continued to move lower, dropping below $4.90, before rebounding back above $5.00.
Livestock and Poultry
In the May Supply/Demand report, USDA lowered its beef production estimates as supplies of both fed and non-fed cattle are expected to decline. Pork production estimates were also lowered on weaker expected farrowings in the second half of 2023. Broiler production is expected to increase, reflecting lower feed costs and tighter supplies of other meats. Turkey and egg production are projected higher as flocks rebuild.
Cattle price projections for 2023 and 2024 were raised on expectations for tighter supplies. Beef exports for 2024 are forecast lower, again on tighter supplies. Hog price forecasts were lowered based upon recent data and weaker-than-expected demand. Broiler and turkey price forecasts were lowered on expectations of increased production.