PUBLISHED September 13, 2023
Rice futures are feeling the pressure as harvest is in full swing. We’ve known for months that this crop would be much bigger than 2022 but concerns about global food security have supported prices. India continues to restrict exports as they have suffered its driest August in 100 years. Beginning stocks for 2023/24 were increased in the monthly WASDE and are now projected to be 30.3 million cwt. based on the quarterly Rice Stocks report. The average yield estimate was increased 52 lbs. per acre to a record high of 7,751 lbs. per acre. Harvested acres were increased to 2.85 million acres. Production is now pegged at 220.9 million cwt. and projected ending stocks are 43.2 million cwt. The average on farm price for long grain is now estimated to be $15.00/cwt, down 50¢ from last month’s report. November appears to have topped for the time being at $16.87½ and selling has accelerated after violating the up-trendline drawn off the July low of $14.75.
December cotton futures look strong going into harvest. After breaking above previous resistance at 88¢, the market has closes as high as 90¢, which now becomes resistance. In the monthly WASDE, USDA increased beginning stocks but lowered production, exports and ending stocks. Production was cut by 860,000 bales as 600,000 acres was cut from the harvested acres projection, leaving it at 8.02 million acres. Yield is pegged at 786 lbs./acre, and total production is now pegged at 13.13 million bales. The projected average on farm price is up a penny from last month at 80¢/lb.
The September WASDE report brought a pessimistic outlook for the market. It predicts slightly higher supplies and ending stocks. For 2023/24 corn production, it forecasts 15.1 billion bushels, a 1% increase of 23 million bushels from last month. This is due to a larger harvested area compensating for a yield reduction. The national average yield is expected to be 173.8 bushels per acre, down 1.3 bushels but up 0.5 bushels from last year. Total U.S. corn use remains unchanged at 14.4 billion bushels, resulting in an increase ending stocks rise by 19 million bushels to reach 2.2 billion. The expected season-average corn price for producers remains at $4.90 per bushel. This, along with the USDA’s larger-than-expected new-crop carryout estimates, led to a drop in corn futures.
The September supply and demand report shows changes for 2023/24, including lower beginning stocks, production, crush, exports, and ending stocks. Soybean production is estimated at 4.1 billion bushels, a 1% decrease of 59 million bushels. This decline is balanced by a higher harvest area. Harvested area was increased by 0.1 million acres from the August forecast, and the yield is now projected to be 50.1 bushels per acre, down 0.8 bushels from last month but up 0.6 bushels from 2022. Ending stocks are expected to be 220 million bushels, down 25 million from the previous month. The U.S. season-average soybean price is forecasted to be $12.90 per bushel, an increase of $0.20 from last month. Similar to corn, these factors contributed to a price decrease.
Wheat prices rebounded after the USDA Supply/Demand report, following earlier lows during the session. The 2023/24 U.S. all wheat outlook for supply and use remained unchanged this month, with offsetting changes in wheat exports by class. The projected season-average farm price for 2023/24 also stayed steady at $7.50 per bushel. This price support was influenced by a lower-than-expected USDA world wheat carryout estimate, driven by reduced crop estimates for Australia, Argentina, Canada, and the European Union. However, the rebound in wheat futures was limited due to weakness in the corn market and ongoing weak export demand for U.S. wheat.
Livestock and Poultry
In the September Supply/Demand report, the forecast for 2023 red meat and poultry production was lowered on lower beef, pork, and broiler forecasts. Slower cattle marketings were partially offset by higher expected carcass weights. Pork production was lowered on slower slaughter and lighter carcass weights. Broiler production was lowered on current slaughter totals and expectations for lower chick placements and lighter bird weights. The turkey production forecast was unchanged from last month.
Beef import forecasts for 2023 and 2024 were raised on strong demand and exports were lowered for both years on tightening supplies and strong competition. Pork imports were increased for 2023 and unchanged for 2024, while export forecasts for both years were reduced on weaker demand. Broiler exports for 2023. And 2024 were reduced on the current pace of trade and a lower production forecast.
Cattle price forecasts for 2023 and 2024 were unchanged from last month. Hog price forecasts for 2023 was lowered on recent price declines. The broiler price forecast for third quarter 2023 was raised on current prices.