Cotton
Hurricane Michael delivered a devastating blow to the Georgia cotton crop. Georgia is the number two producer of cotton in the U.S. following Texas, and farmers there had 1.420 million acres of cotton planted this year. USDA says 20 percent of that cotton was harvested when Michael came ashore. Farmers were reporting 2 1/2 to 3 bale-per-acre yields before the storm. Early estimates have losses pegged at approximately 1 million bales, which represents approximately 1/3 of Georgia’s expected harvest. The market reaction has been muted, however, with initial gains tempered by an uncertain demand situation. Buying interest has waned anytime December challenged resistance at 79 cents. In the October supply/demand report, USDA lowered the export projection by 200,000 bales to 15.5 million. Weekly export sales were extremely disappointing at 32,700 bales for 18/19 delivery and 24,200 for 19/20 delivery. China was the dominant buyer. USDA also lowered their average on-farm price estimate to a range of 69 cents to 77 cents. 

Rice
Rice futures continue to chop along mostly sideways. The harvest is approaching completion, especially in the south, with 88 percent of the crop in the bins nationwide as of October 14. Arkansas farmers had 92 percent of the crop harvested on the same date, 2 percent ahead of the five-year average. Dryer weather late this week should enable farmers here to wrap up harvest in short order. Disappointing export sales continue to pressure the market. Last week’s shipments totaled only 24,800 metric tons, and shipments weren’t much better at 26,700 metric tons. In the October production and supply/demand reports, the 18/19 crop was reduced by 700,000 cwt to 218.8 million cwt. That was due to decreased yields forecast for Texas and California. Of the reduction, 500,000 cwt were long grain, with the remaining 200,000 cwt medium and short grain. Ending stocks were lowered a corresponding amount, as no other changes were recorded. The average on-farm price projection remains $11.20-$12.20 per cwt. November futures are chopping along mostly sideways, with resistance around $11 continuing to curtail buying interest.

Soybeans
The soybean harvest had stalled thanks to wet conditions throughout many of the soybean producing states across the country. Farmers only harvested 3 percent of the crop last week, bringing the total to 38 percent harvested. That is down 9 percentage points from 2017 and 15 percentage points below the 5-year average. The next two weeks are forecast to bring dryer conditions to much of the corn belt, and that should allow producers there to get back in the field. The wet conditions have, however, caused significant damage to the crop that remains in the field, and deep discounts are being reported. The market has absorbed the larger-than-expected stocks report that adjusted the beginning stocks estimate higher by 43 million bushels, and the October crop report actually cut the production estimate by 3 million bushels, lessening the blow somewhat. The average on-farm price was unchanged from the previous report at $7.35-$9.85. November futures rallied early in the week, but have run into resistance above $8.90. The market does have nearby support at $8.47. A look at the November 2019 contract shows that long-term resistance has been broken and the contract is technically trending higher.

Corn
The October crop report showed a lower expected yield for corn, with farmers now forecast to harvest 180.7 bushels per acre. While the corn harvest slowed to a crawl thanks to weather last week, with only 5 percent harvest the week ending October 14, farmers remain ahead of last year’s pace (27 percent harvested) and the five-year average (35 percent harvested) with 39 percent of the crop in the bin. Export news is supportive for corn, with commitments up over 50 percent from the year ago total, and the stocks-to-use ratio lowered to 11.5 percent. USDA is still projecting an average on-farm price of $3.00-$4.00 per bushel. The December futures contract has tough resistance between $3.80 and $3.85. With the fundamental picture looking more favorable to corn over soybeans, it will be important to watch planting intentions for 2019, as farmers consider shifting acres from soybeans to corn.

Livestock
Hog futures appear to have charted a seasonal top. Increases in hog supplies and demand concerns sparked a selloff which has accelerated as technical support has been broken. February could be headed to fill the gap left during the August rally between $57.07 and $56.57. The next two quarters are expected to see production totals ahead of last year, and with Chinese tariffs on U.S. pork continuing, there are doubts about the market being able to absorb the additional production.

Cattle futures have also been under pressure lately. The selling was sparked by future’s wide premium to cash prices. December live cattle have key support just below $116, and a move below that level would spark additional selling. Strong exports remain supportive, but concerns about domestic demand amid stock market weakness will limit any upside.