Corn
USDA shocked the market with their June 30 acreage report. Corn acres were pegged at only 92.006 million. While that is up 3% from the 2019 crop, it is down from 97 million acres in the March Planting Intentions Report. It is also well below the average pre-report estimate of 95.207 million acres. It has been assumed for months that the U.S. would top 3 billion bushels of carryout. Despite mostly favorable growing conditions, this report makes that unlikely. USDA says 71% of the crop is now rated good to excellent, with 23% in fair condition. The weather outlook suggests the crop will be under increasing stress in the next 2 weeks. Stocks will still be more than adequate, and the June 1 stocks report shows current corn supplies at 5.224 billion bushels. December corn saw a swift recovery in response to the reports but found resistance two days in a row at $3.63, which is looking like a double top as prices have been working lower from that point this week. 

Soybeans
USDA has pegged soybean acres at 83.825 million acres, up slightly from USDA’s March planting intentions estimate of 83.5 million. Pre-report estimates had pegged the crop at 84.716 million. While the report does show some of the expected shift from corn into soybeans due to corn market weakness this spring, it seems analysts did not anticipate a 7-million-acre reduction in total planted acres of all major crops. June 1 stocks totaled 1.386 billion bushels, down from 1.783 billion a year ago. 71% of the crop is currently rated good to excellent, but the forecast for the next two weeks suggests the crop will be under some stress. The November contract will have resistance in the $8.90 area and then at the chart gap between $9 and $9.03.

Cotton
The cotton market also got a shock as USDA cut over 1.5 million acres off their March estimate. Given the price decline that has occurred since the first survey occurred, this was not entirely unexpected, but a crop of only 12.185 million acres was well below the average trade guess, and down 11.3% from last year. While the Arkansas crop appears to be in good shape, with 78% of the 500,000 acres rated good to excellent, that isn’t the case everywhere. In Texas, only 22% of their 6.6 million acres are rated good to excellent. The December contract has so far done a good job of holding onto gains charted in reaction to the report, and is trading at the highest levels since early March.

Rice
We have known for months that the rice crop would be much bigger than last year’s, but the market reacted negatively anyway to the June 30 acreage report. U.S. acreage was pegged at 2.870 million acres, up 23,000 acres from the March prospective plantings report despite a wet spring and a late start to the planting season. Arkansas’ crop is estimated at 1.431 million acres, of which 1.25 million is long grain. The September contract has found support at $12 for the time being, with resistance around $12.40.

Cattle
Cattle future remains under pressure from weaker cash cattle prices as a result of more than ample supplies of heavyweight cattle that backed up in the supply chain as processing plants closed due to COVID-19 outbreaks. Wholesale beef prices are also weak. The longer-term economic forecasts and predictions of a second wave of coronavirus in the fall have traders worried about beef demand and are limiting the upside potential. The October live contract continues to fail at resistance at $105. October feeders have resistance around $137.

Hogs
Hog futures contracts continue to set new lows regularly as the downtrend remains unabated. There is still a large backlog of heavyweight hogs in the pipeline after plant shutdowns this spring, and as plants have reopened that product is hitting the market. Cutout values are at their lowest level in two months.