Livestock, Poultry, and Dairy
In the December Supply/Demand report, released on Thursday, USDA made few changes to their red meat and poultry production estimates for 2020. For 2021, total red meat and poultry production was reduced from the previous report as lower beef and poultry production more than offsets slightly higher pork production. Beef production was reduced on lower expected fed and non-ed cattle slaughter in the first half of the year. Broiler and turkey production forecasts were lowered on recent hatchery data. Pork production was raised on heavier carcass weights. Price forecasts for cattle and broilers in 2021 were raised.

Milk production for 2021 was raised on higher cow numbers. Cheese and butter price forecasts were reduced on weaker expected demand and larger supplies. For 2021, forecasts of both Class III and Class IV are reduced from last month on weaker prices for cheese and butter respectively. The 2021 all milk price was lowered to $16.60/cwt. 

Corn
Corn futures charts look toppy, but selling pressure has been limited. USDA did not change the balance sheet for US corn in the December supply/demand report, leaving ending stocks at 1.702 billion bushels. World ending stocks were pegged at 288.96 million metric tons, down slightly from last month. Technically, a close for March below $4.15 would likely spark additional selling, but that support has held so far, despite the marking briefly trading to $4.14 ½. There has been little news on the export front, and beneficial weather in South America has improved the crop prospects in growing regions there. Additional Chinese demand could support the market if/when it materializes.

Soybeans
USDA lowered their domestic carryout to 175 million bushels, down 15 million bushels on an equal increase in the crush estimate. That would be the lowest carryout in 7 years, and many private estimates are expecting an even lower total.  The weather in South America is favorable at the moment, improving prospects for a good crop and more competition for export markets. There hasn’t been much activity in the export markets to really fuel the bull market, and we are seeing that bullishness wane. Technically, January has been trading at 4-year highs but continually failed at the $12 level before charting a bearish last week. A close below $11.50 would likely spark additional selling.

Cotton
Cotton futures got a big boost from today’s supply/demand report. USDA slashed the production estimate by more than 1.1 million bales and raised exports by 400,000 bales. That resulted in a 1.5 million bale cut to projected carryout. The cut in production was due to a cut of 61 lbs. per acre to the cotton yield, which is now pegged at 850 lbs. per acre. Texas production was cut by 900,000 bales and Georgia was cut by 100,000 bales. This corrected what analysts have seen as a miscalculation on the part of USDA, and confirmed what many in the industry have thought for a while. The average on-farm price was raised a cent to 65 cents per pound.

Rice
Rice futures have seen some weakness over the past week. The market looks to be building support at $12.20, but a close below that support could result in additional selling pressure and opening up the possibility of a retest of the spike lows of $12.15 and $12.05. The USDA December supply/demand report was a mixed bag for rice. They raised their all-rice ending stocks estimate by another 1.3 million hundredweight. Long grain ending stocks were raied by 2 million cwt. to 38.2 million, but the average long grain price was raised a dime to $11.80.