Livestock, Poultry, and Dairy
In the August Supply/Demand Report, USDA lowered the forecast for total meat production from the July report. Projected decreases in pork production more than offset higher beef and poultry production. A faster pace in beef slaughter is responsible for higher beef production totals. Lighter carcass weights and a slower pace of slaughter in the third quarter are responsible for the decline in the pork production forecast. The egg production forecast was also increased. For both 2020 and 2021, beef imports were raised, while the export forecast was decreased. The 2020 broiler export forecast was reduced on slower demand from a number of U.S. trading partners.

Despite a smaller dairy herd, the milk production forecast for 2020 was raised from last month on higher milk-per-cow projections. The all milk price forecast was lowered to $17.95 per cwt. The all milk price forecast for 2021 was unchanged at $17.05 per cwt.

Rice
The August reports didn’t hold big changes for rice. The rice production estimate was down slightly from the previous forecast due to a decrease in the expected yield. The expected yield is now forecast at 7.600 pounds per acre, down 89 lbs from the previous estimate, but up from last year’s yield of 7,471 lbs/acre. Imports for 19/20 are expected to set a record or 36.7 million cwt, mostly from Asian countries. Projected ending stocks for 20/21 were raised to 44.3 million cwt, 44% higher than ending stocks for 19/20. Projected world ending stocks for 20/21 are projected to set a record at 185.2 million tons. The average all rice season-average price is unchanged from the previous report, and pegged at $12.70, down from $13.10 in 19/20. Technically, the most-active November contract has been building bullish momentum, charting another bullish outside day on Wednesday before moving to a new high on Thursday, moving prices closer to USDA’s projected price for the year.

Corn
Corn futures have been on a wild ride over the past few days. December bounced off the contract low at $3.20 before exploding higher and closing previous chart-gap resistance, partially in reaction to the devastating storm in Iowa that destroyed millions of acres of corn in that state. Futures appear to be running out of steam at this point, though. USDA is projecting U.S. average yields to set a record of 181.8 bushels per acre, and total production to also set a record of 15.3 billion bushels, up 12% from 2019. A more complete understanding of the total effects of the derecho in Iowa will come from farmer surveys in the September production report.

Soybeans
Soybeans have also posted gains after the devastating derecho in Iowa. The total effect on the crop is unknown at this time, but millions of acres have been damaged. In the August report, USDA reported they expect U.S. farmers to set a new soybean yield record of 53.3 bushels per acre. The current record was set in 2016 at 52 bushels per acre. That total would push the crop above 4.4 billion bushels, which is 24% bigger than the 2019 crop. The supply/demand report showed a 5 million bushel increase in the crush, and reduced ending stocks an equal amount. The total supply for 2020 is now projected to be 5 billion bushels, which would be the largest on record. The net result of the report was a decrease of 15 cents in the average on-farm price from $8.50 to $8.35.  Technically, November beans have gapped above $9, but the rally looks to be running out of steam, with resistance building around $9.20.

Cotton
The recovery in cotton futures has stalled out, with December unable to move above resistance at 65 cents. For the time being, prices are consolidating in a relatively narrow range between that resistance and support at 62 cents. In the August report, USDA projects a record setting yield of 938 pounds per acre. That’s up from 823 lbs/acre in 2019. The current record yield is 904.7 lbs/acre. If realized, this will push production above 18 million bales, down 9% from 2019. The supply/demand report lowered the domestic use of cotton by 300,000 bales to a record low of 2.7 million bales, which pushed 2019 ending stocks up to 7.2 million bales, despite an increase of 200,000 bales in exports. The resulting carryout means the cotton supply for 20/21 is projected to be 25.28 million bales, the largest domestic cotton supply since 2007. The average on-farm price is projected at 59 cents per pound, unchanged from the July report.