Rice
Rice futures remain near contract high levels, with most-active November moving mostly sideways below the contract high of $16.63. Futures aren’t feeling harvest pressure like in a typical year, as the El Nino weather pattern and wars in the Middle East and Ukraine threaten global food security. India is expected to have a smaller crop as their monsoon season provided inadequate rains to achieve optimum yields, and prices are at 12-month highs as a result. Current export demand remains steady and is outpacing the previous marketing year by 13%, which should help as the market works through the higher-than-expected carryover stocks reported in the Aug. 1 stocks report. USDA says 90% of the Arkansas crop was harvested as of Sept. 27, well ahead of the 5-year average of 73%. While prices on the board remain near contract-highs, basis in Arkansas is running $2.00-$2.50 under the board price.
Soybeans
November soybean futures continue to show signs that a major top has been put in. The Sept.11 high of $13.35¼ was charted as part of a bearish key reversal. While follow-through selling has been limited, a second bearish outside day was charted on Sept. 28. Previous support at $12.92 was broken Monday, suggesting additional weakness is likely. Arkansas farmers have already harvested 61% of the soybean acres in the state, well ahead of the 5-year average of 35%. Nationwide, harvest progress is running even with the 5-year average of 17%, and given the forecast, the slow pace of harvest in parts of the Midwest could limit losses in futures. Tightening stocks are also a supportive factor. The Sept. 1 Stocks Report, released Sept. 30, showed 315 million bushels in storage, down 3% from the previous year. However, the meeting between President Trump and Chinese President Xi Jinping did not yield the news soybean farmers were hoping for. China will not lift the 10% tariff on soybeans and is reporting that weak animal feed demand and negative crush margins will limit China’s soybean purchasing in the coming months.
Corn
December corn futures continue to face persistent pressure as prices drift back toward the Aug. 24 chart gap around $5.09 to $5.10, leading many analysts to forecast that the seasonal top is already in. While China dropped its 10% tariff on corn, there is no indication of an immediate need for additional imported feedgrains, suggesting any future Chinese buying may wait until prices drop to bargain levels. Harvest is accelerating smoothly at 18% complete, though early field results show disappointing yield data, prompting some traders to anticipate a 2.0 to 2.5 bushel-per-acre cut in upcoming reports. Meanwhile, the Sept. 30 USDA Grain Stocks report pegged old-crop corn supplies on Sept. 1, at 2.10 billion bushels, up 35% from last year, with 787 million bushels stored on-farm and 1.31 billion off-farm. Indicated June through August disappearance reached 3.20 billion bushels, compared to 3.10 billion during the same period last year.
Wheat
Wheat futures have surrendered $1.00 this month alone, capping off an extraordinary four-month run that saw March Chicago futures rally from $6.00 to $8.00 before retreating to $7.00. From a technical view, $7.00 on the December Chicago chart represents a key 50% retracement of that entire $2.00 surge. Fundamentally, demand remains weak with year-to-date export sales down over 30% from last year, marking the sluggishness since the 2023/24 season. It appears the market overshot on Black Sea conflict headlines and global supply fears. The Sept. 30 USDA report set total wheat stocks on Sept. 1, at 1.85 billion bushels, down 14% from last year, with 547 million stored on-farm and 1.30 billion off-farm. June through August disappearance totaled 608 million bushels, down from 710 million during the same period a year ago.
Cotton
The cotton market suffered a steep selloff recently, with several contracts hitting limit-down as a combination of bearish factors reached a head. In addition to normal seasonal harvest pressure and sluggish global demand, sentiment was heavily weighed down by a scathing national news article detailing alleged missteps in the cotton export industry. Prices have fallen to their lowest levels since mid-July, giving back roughly 84% of the gains made since the June lows. Domestically, U.S. crop condition ratings ticked up slightly last week but remain well below historical norms with little room for late-season recovery. Harvest progress is moving along smoothly, sitting at 17% complete and running slightly ahead of the five-year average.
Livestock
The September Cattle on Feed report showed record-low feedlot placements and pegged the September 1 feedlot inventory below trade expectations, and futures gapped higher as a result. However, the market has been working lower ever since. Ample supplies of market-ready cattle in the near term could limit the upside. One of the most surprising parts of the report showed that the supplies of cattle on feed for more than 180 days were up 63.1% from a year earlier at more than 2 million head, and ICE operations in feedlot areas continue to back up supplies.
Hog futures remain under pressure from weak cash hog and wholesale pork prices. The market appears to be in the process of bottoming as futures trade near contract-low levels. The recent UDSA inventory report showed a total inventory down 1.5% from a year ago, and the breeding heard down 1%.