Market Briefs | October 2, 2024

Rice
Despite recent weather delays, rice harvest remains well ahead of the usual pace. USDA says Arkansas farmers have harvested 85% of the crop, compared with a five-year average of 69%. Nationally, 78% of the crop is in the bins, compared with a five-year average of 67%. Harvest pressure has begun to ease, and weekly export sales have generally been supportive. The recent interest rate cut and other economic factors have resulted in declines in the value of the dollar, making U.S. commodities more affordable. The threat of expanding war in the Middle East and the continued war in Ukraine pose a threat to food safety that is potentially global in scale, and that could support the rice market. India has announced that they have lifted a ban on exporting non-basmati white rice, which has been in place since July 2023. Global prices have already begun a decline as the market adjusts to the release of India's stocks. Technically, November futures have an upside objective near $15.60. A close above that resistance would open the possibility of a retest of resistance at the contract high of $15.86.

Cotton
The cotton market appears to have confirmed a bottom at the low near 66 cents and posted solid gains during September. December futures have been chopping along in a mostly sideways pattern in recent days, however, unable to close above resistance at 74 cents. The harvest is underway and ahead of the usual pace. Arkansas farmers have picked 21% of the crop, ahead of the five-year average of 11%. While Hurricane Helene caused catastrophic damage, the cotton crop was not as affected as it was feared. 31% of the crop was rated good to excellent, down from 37% in the previous report as the Georgia crop suffered some damage. Some additional quality losses could also result with so many open bolls in the field. Exports have been disappointing, despite losses in the value of the dollar.

Corn
The corn harvest was reported as 21% complete as of Sunday, September 29. Early yield reports are strong, and 64% of the remaining crop is in good to excellent condition according to USDA. 24% is in fair condition and only 12% is in poor to very poor condition. December futures appear to have charted a double bottom at $3.85 in late August. The next upside objective is $4.41, the top of a huge bearish reversal charted in June. The lower prices have resulted in more domestic and export purchases, helping the market to build upward momentum. The market received some relatively bullish news from the recent Sept. 1 stocks report. While stocks are still up 29.1% from the previous year, the total corn stocks estimate of 1.760 billion bushels was near the low end of trade expectations.

Soybeans
Soybean futures are attempting to confirm a bottom. November beans have support at a double bottom of $9.55 but have stalled out at resistance near $10.80 for the time being. The lower prices have led to strong demand, and that is providing some support. 26% of the crop nationwide has been harvested, compared with a five-year average of 18%. In Arkansas, 47% of the crop is in the bins, compared with the usual pace of 29%. Significant rainfall totals from Hurricane Helene through parts of the south and Mid-West will certainly slow harvest. The Sept. 1 Quarterly Stocks Report pegged soybean stocks up 48.1% from the previous year, which could limit the upside potential for prices.

Cattle
Live cattle futures continue to rebound after recent losses. However, seasonal weakness in wholesale beef prices and negative packer operating margins could limit the upside. October futures have tough resistance at $188, and February has resistance at $189. The relatively tight supply of fed cattle will be supportive. However, supplies do usually increase in the fall due to seasonal factors. Current cash market prices have been stronger than anticipated. Feeder cattle futures are following live cattle prices higher, despite higher corn prices.

Hogs
Lean hog futures have renewed a upward movement after a few days of weakness. The December contract is in position to challenge resistance near $77. The quarterly inventory report was mostly as expected, with the total inventory 100.5% of the previous year. However, the inventory of hogs weighing over 180 lbs came in above expectations and suggests that in the short-term we could see increases in marketings.