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 August live contract is building support at the recent low of $93.57 and resistance around the $98 area. August feeders are holding above support at $128.33, and have resistance at $136.72.

Hogs
Summer hog futures contracts continue to set new lows regularly as the downtrend remains unabated. Deferred contracts have also moved lower but have held above support set earlier in the spring. 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. The July contract took out previous support at the double bottom at $49, setting a new low of $48.17. Resistance will be at the chart gap between $58 and $58.82. October has support at the contract low of $48 and resistance at the recent high of $54.98.

Dairy
In the June Supply/Demand report, USDA raised the milk production estimate for 2020 based on higher expected cow numbers. Price forecasts for cheese, butter, and nonfat dry milk were raised from the previous month due to recent price strength and stronger anticipated demand. The all milk price for 2020 was raised to $16.65 per cwt. The 2021 milk production forecast was also raised from last month on higher expected cow numbers and stronger growth in milk per cow. The 2021 all milk price forecast was raised to $16.20 per cwt.

Cotton
Cotton futures are trending higher, but the recovery has been slow and not without setbacks. The monthly supply/demand report resulted in a setback early this month as traders reacted to the negative report. USDA raised the 19-20 carryout to 7.3 million bales, up 200,000 bales from last month. USDA also raised its 20-21 carryout forecast by 300,000 bales to 8 million bales. That total was well above the average trade guess and resulted in selling pressure. There is little buying interest in U.S. cotton currently outside of China. Weekly net export sales were 102,700 bales for 19-20 and 67,800 bales for 20-21. The July contract is now trading at the highest levels in 4 months but need to close above 62.50 cents to suggest further gains are possible. December has stalled out at resistance around 60 cents.

Rice
What was an almost $10 difference between old and new crop futures two weeks ago has narrowed to just over $1 as July rice futures collapsed from their near-record setting highs. Support for September is the recent spike low of $11.65. The monthly supply/demand report added to the negative undertone of the market, as USDA added 2.0 million metric tons to the 19-20 carryout estimate and added 1.5 million metric tons to the 20-21 carryout estimate. Weekly net export sales were a negative 13,900 metric tons due to cancellations.

Corn
Corn futures have had a rough week and fell sharply on Thursday. July found support at $3.15, but new crop December plunged to new contract lows, which means that support now begins at $3.24. Expectations for a record setting crop continue to loom over the market, as USDA says 72% of the crop is in good to excellent condition across the country. Export sales this week were pretty terrible at 21.2 million bushels, near the bottom of the range of pre-report estimates. Shipments were better than expected at 51.7 million bushels.

Soybeans
Soybeans have also posted big losses this week. November has repeatedly failed at resistance at $8.85 and has broken out of the bottom of a three-week trading range. Weekly export sales were within expectations at 42.7 million bushels. USDA says 70% of the crop is in good to excellent condition, with an additional 25% in fair condition, and the potential for a big crop could continue to limit upside potential.

Cotton, Rice Divisions to Meet Next Week

Both the Cotton and Rice Divisions will meet next week by Zoom/conference call.

The Cotton meeting will take place Tuesday, June 30, at 9 a.m. and will include updates on the crop from Extension Agronomist Dr. Bill Robertson and the Boll Weevil Eradication Program from Director Regina Coleman. Dr. Gary Adams, President and CEO of the National Cotton Council will discuss the Cotton Trust Protocol and the importance of registering farms. Cotton division members are urged to participate in order to identify topics for policy development. If division members can’t attend, they are urged to select an alternate from their county. To connect to the cotton meeting via Zoom or phone:

Join Zoom Meeting

https://zoom.us/j/98274716441?pwd=dVh6VmM1cFIxdVovczc5VHI2ejc2QT09

Meeting ID: 982 7471 6441

Password: 531052

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Meeting ID: 982 7471 6441

Password: 531052

The Rice Division will meet July 1 at 6:30 p.m. The meeting will include updates on international trade issues and the market outlook from Peter Bachmann, Vice President for Trade Policy, USA Rice, and Keith Glover, President and CEO of Producers Rice Mill, respectively. Josh Hankins, Rice Stewardship Partnership Director with USA Rice, will also be on the call to discuss the partnership and RCPP. Rice division members are urged to participate in order to identify topics for policy development. If division members can’t attend, they are urged to select an alternate from their county. To connect to the rice meeting via Zoom or phone:

Join Zoom Meeting

https://zoom.us/j/97387121059

Meeting ID: 973 8712 1059

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