Market Briefs | August 7, 2024

Rice
Rice futures have been on a roller coaster ride for over a month. After setting a new 6-month low in mid-July, September futures completed a 62% retracement of the sell-off. The market began August with a huge bearish reversal, suggesting the recovery was over, and another downturn was on its way. There has since been little follow-through selling, but that high of $15.38 is now key resistance. A close above that level would negate the key reversal and signal a retest of the contract high of $15.80. The low of $14.80, also charted on Aug. 1, is key support, and a close below that level could signal a retest of the low at $14.15. The harvest has begun in Louisiana and Texas in earnest, and we have seen the first loads of rice delivered in Arkansas this week. Nationwide, USDA says 80% of the crop is in good to excellent condition. In Arkansas, that total is 79%.

Cotton
Cotton futures continue to trade at or near contract low levels, with 70 cents now key resistance and the first upside objective in confirming a bottom. 45% of the cotton crop is rated good to excellent nationwide, up from 41% a year ago. Combined with acreage that is up 14% from last year, and that means the potential for a larger-than-expected cotton crop in the U.S. Strength in the dollar is also a bearish factor for prices, but stronger crude oil will offset that pressure to some degree, as higher oil prices make competing synthetic fibers more expensive. In Arkansas, 74% of the crop is rated good to excellent, 91% of the crop is setting bolls, and 13% of the crop has opening bolls.

Corn
Corn prices remain under pressure as a global stock and commodity selloff accelerated this week, coinciding with crude oil prices hitting their lowest levels since early February. Contributing factors to the decline in corn futures include forecasts of cooler weather and assumptions of potentially record-high yields. The September contract is hovering around the recent low of $3.78, which is seen as support, while the 20-day moving average of $3.93 acts as resistance. In Arkansas, corn conditions have remained steady, with 76% of the crop rated as good to excellent. Nationally, the condition of the U.S. corn crop has declined by 1% over the past week to 67% rated good to excellent, which is still a 10% improvement compared to the same period last year. These positive condition reports, along with higher continuous stock reports, continue to exert downward pressure on prices.

Soybean
A bumper U.S. crop appears to be on the way, increasing pressure on the soybean market and favoring bearish trends. November soybeans are testing the contract low again, primarily due to weakness in soymeal. The November contract has support at $10.12, while the 20-day moving average of $10.44 serves as resistance. Rainfall in Minnesota, Wisconsin, and Michigan, as well as expected precipitation in Western Nebraska and the remnants of Hurricane Debby in the southeast U.S., are factors influencing crop conditions. In Arkansas, the crop condition improved by 1% over the past week, with 72% rated as good to excellent. Nationwide, soybean conditions improved by 1% to 68% rated good to excellent, which is a 14% improvement compared to last year. These favorable condition reports, along with higher continuous stock reports, continue to keep prices under pressure.

Cattle
Cattle futures have plummeted in recent days as the long-term rally came to an abrupt end. October futures violated uptrending support near $185 last week, confirming that a top has been charted for the time being. Support can now be found at $176, and further losses could signal a move toward support at $171. The collapse in prices is largely attributed to sharp U.S. stock market losses that have triggered demand worries and fund selling. October feeders are headed for a retest of the 8-month low below $236.

Hogs
Hog futures are attempting to consolidate in the face of volatility in other markets. October has resistance near $79 and support in the form of a double bottom just above $68. Strength in cash hog and wholesale pork prices suggests that demand is strong, but pork prices may peak soon due to seasonal factors, if not due to overall economic concerns. Marketings are expected to increase seasonally, as well, adding further pressure to the market.