Coronavirus Food Assistance Program
USDA has announced a $19 billion program to help offset the devastating effects the Coronavirus has had on the agriculture sector. The program includes $16 billion for direct payments to livestock, dairy, row crop and specialty crop farmers impacted by low prices and disrupted supply chains. The remaining $3 billion is reserved for food purchases and distribution. 

Direct payments to producers will be coupled to actual 2019 production and based on actual losses agricultural producers experienced. To qualify for a payment, a commodity must have declined in price by at least 5% between January and April. USDA has said payments will be determined using two calculations. Producers will be compensated for 85% of the price loss from January 1-mid-April (no final date has been confirmed). The second calculation will be based upon estimated losses from mid-April through the next two quarters. Producers will be compensated 30% of those expected losses. The exact prices to be used have not been announced at this time. 

Payments are expected to be distributed in May. Payment limits apply, set at $125,000 per commodity with an overall limit of $250,000 per individual or entity. This is a separate payment limit and will not impact participation in other FSA programs. 

There is concern about coverage for domestic aquaculture, as it is currently uncertain where or how domestic aquaculture will be covered. Additionally, funds are intended to cover producers who own the commodity or product, so animals raised under contract are not expected to be covered. 

Cattle
Plant closures and disruption in the beef supply chain are the dominant factors in the live cattle market now. A surge in boxed beef prices this week has been supportive for futures. October live futures charted a bullish key reversal on Thursday, but will need to close above technical resistance at $97.50 to open more significant upside potential. August feeders remain capped by resistance at $130. 

Hogs
Hog futures have rallied this week as the supply chain continues to see major interruptions. Plant closures due to Covid-19 have significantly reduced slaughter capacity in the U.S. It is estimated that current closures have reduces slaughter capacity by 58,000 head per day. The monthly cold storage report showed frozen pork supplies at 621.9 million pounds at the end of March, down 27% from March 2019. That decline, though, is due to increased consumer demand as lockdowns began. It does not reflect plant shutdowns, as those began occurring in April. As a result, composite pork cutout values continue to increase as do packer margins for those still in operation. China purchased 35,000 tons of U.S. pork this week, providing additional price support. Technically, the October contract is building support at the recent low of $48, but failed above resistance at $62. 

Corn
Corn futures remain under pressure despite having lost 20% of their value since January. USDA prospective plantings report estimated 2020 acreage up 8% from last year at 97 million acres. Weather forecasts show conditions that are generally favorable for field progress. Ethanol stocks are now at a record high of 27.7 million barrels, and weekly output has been throttled down to the lowest levels since reporting began in 2010. Exports are now 20.2% below the year ago total, which means exports are not keeping pace to meet the current USDA estimate for the marketing year. On the futures chart, December has resistance at $3.40 ¼ and support at the contract low of $3.25. 

Soybeans
Soybeans have seen some strength this week. Exports for the week came in at 1.078 million metric tons, nearly tripling the total from last week. Despite declines, U.S. soybeans are still priced above Brazil beans, and the Real is now at a historic low versus the dollar, which will create tough competition in export markets. November will have to overcome touch resistance between $8.80 and $8.90 before challenging significant resistance at the chart gap at $9.  

Rice
Rice futures have seen wild price swings in recent days. Old crop rice is in short supply, and prices have soared to 6-year highs. New crop futures, however, are trading at a significant discount to new crop. Weekly exports were disappointing this week at just 28,700 metric tons. The 2020 crop is expected to be significantly larger than the 2019 crop, which is limiting the upside potential. USDA says Arkansas farmers have seeded 33% of intended acres, compared with a 5-year average of 58%. 

Cotton
Cotton futures continue to recover from losses due to the global pandemic Cotton has been under pressure from a sharp decrease in demand due to mill closures around the world, resulting in a 90% decline in orders for U.S. cotton yarn and fabric. Carryover strength from the stock market and crude oil futures helped provide support for the bounce. Weekly net exports came in at 434,800 bales for 19-20 delivery, with almost all of it going to China.