Rice
Rice harvest across the country was 70 percent complete on Sept. 30, and the Arkansas harvest was at 77 percent. With harvest winding down we have a better handle on the size of the crop, and that has mostly been built in to prices at this point. The September USDA reports increased the production estimate to 219.5 million cwt, up from the August estimate of 210.9 million cwt and the 17/18 crop of 178.2 million cwt. World production estimates have decreased, however, and global demand is expected to be strong during the 18/19 marketing year.  Last Friday, November futures set a new contract low of $9.66, a penny below the previous low set on Sept. 19. This week futures bounced off that level, and have been building on that support, charting strong gains four days in a row, bringing resistance at $11 back into play. Strong weekly export sales helped support prices. Sales totaled 138,500 metric tons, with Mexico, South Korea and Honduras among the buyers. Weekly shipments, however, were a disappointing 8,100 metric tons. Iraq issued a rice tender last week, as well, but then bought 90,000 metric tons of rice from Vietnam outside the tender process. The announcement that the U.S., Mexico and Canada had finally reached an agreement on trade was also a big factor in moving this market. 

Cotton
Cotton futures continue to work lower. The market continues to be plagued with demand concerns. U.S.-China relations are impacting demand for U.S. cotton as the trade war rages on. A stronger dollar is also a factor, as it makes U.S. cotton less competitive in the global marketplace. Weekly sales totaled a disappointing 70,300 bales for 18/19 delivery and 52,800 bales for 19/20. With 19 percent of the cotton crop harvested nation-wide, early yield reports are impressive, sparking concerns of a larger than expected crop. The market facilitation payment of 6 cents per pound of cotton on 50 percent of a producer’s actual 2018 production, has the potential to reduce abandonment, increasing the total harvest even more. Wet, messy conditions across the mid-south are sparking quality concerns. December has some support at 75 cents on the weekly continuation.

Soybeans
In the September Stocks Report, USDA confirmed the impact the trade war has had on soybeans. Old crop stocks of soybeans stored in all positions on Sept. 1, totaled 438 million bushels, up 45 percent from the same date last year. Add that carryover to projected 2018 production of 4.693 billion bushels and the challenge for the market is apparent. Export commitments are now 15.7 percent below last year’s pace. Demand from Mexico and Europe have provided some support. November futures are now building on support at the contract low of $8.12 ¼, but with harvest moving into full swing and no end in sight to the trade war with China, that support could be tested in short order. Basis levels have also been impacted significantly, and USDA is projecting the average farm price for 18/19 to be $7.35-$9.85.

Corn
The trend in corn futures is mostly sideways. Harvest is progressing ahead of the 5-year average pace, with 26 percent of the crop in the bins. USDA is expecting an average yield of 180.5 bushels/acre, for total production of 14.827 billion bushels. The Sept.1 stocks report did increase to 2.140 billion bushels, and while the increase was bearish for the market, that total is down 7 percent from a year ago. Export demand for corn has been supportive, as has ethanol production/demand. December futures are building on support at the recent low of $3.42 ½. Overhead resistance begins at $3.70, with additional resistance near $3.80.

Livestock
Hog futures have moved to 3 month highs on strength from the cash market. However, as plants in North Carolina resume operations after Hurricane Florence cleanup, that strength has weakened somewhat. Daily slaughter has increased in recent days and is now outpacing year-ago numbers a bit. December futures failed at resistance at $60/cwt, which has sparked technical selling and speculative profit taking. Chinese and Mexican import tariffs have been limiting U.S. exports, but the CME cash hog index remains strong.

Live cattle futures continue to trend higher. December is testing previous resistance at $119, but futures’ current premium to cash prices could limit the upside further. The Sept. 1 feedlot inventory came in above trade expectations, resulting is some selling pressure as well