April Livestock, Poultry, and Dairy Supply/Demand Report
The 2021 forecast for total red meat and poultry was reduced from the previous report on lower expected pork and turkey production. The beef production forecast was raised on higher slaughter estimates for the second half of the year, but gains were limited by expectations for lighter carcass weights. Pork production was lowered on a slower pace of slaughter through the rest of 2021, but it was partially offset by heavier hog weight estimates. USDA’s March Quarterly Hogs and Pigs report estimated that the December 2020-February 2021 pig crop was approximately 1% smaller than the previous year and producers have indicated intentions to farrow 3% fewer sows during the March-May time frame. The annual broiler production estimate was unchanged from the previous report, while both turkey and egg production was lowered in the April report.

For 2021, the beef import forecast was reduced on weakness in imports from Australia while exports were unchanged. The pork export forecast was raised on expectations for firm global demand for U.S. pork products. The pork and turkey import forecast was also raised.

The 2021 cattle price forecast is raised on current price strength and firm demand. The hog price forecast was raised on recent strength and lowered supply expectations. The broiler price forecast was reduced, reflecting a lower first-quarter price and weaker demand while the turkey price forecast was raised slightly on lowered production.

Dairy production for 2021 was raised from last month, on increased cow numbers. Product price forecasts were raised on improving demand, both domestically and internationally. Prices of cheese, butter, nonfat dry milk, and whey were raised, boosting both Class III and Class IV prices. The 2021 all milk price forecast was raised to $18.40 per cwt.

Hogs
As mentioned, the Quarterly Hogs and Pigs Report provided a bullish surprise for the market. The report showed that on March 1, all hogs and pigs were down 74.773 million head, a decline of 1.8% from the same time last year. This total was outside the range of average trade expectations and are the first year-over-year decline for March since 2014. The number of market hogs also declined 1.8%, and the number of hogs and pigs kept for breeding declined 2.5%. The market continues to trend higher, but June has charted a bearish reversal this week, signaling a potential top. The chart gap to $103.55 is the downside objective.

Cattle
Live cattle futures have sold off sharply in recent days. June set a new contract high of $125.62 ½ before gapping lower and retracing recent gains. Support is near $118. August feeders also charted a new high last week before selling off this week. Support is found between $117 and $118. Feeders are under pressure from higher corn prices, and that has carried over into the live cattle market. Wholesale beef prices are soaring, though, and packer margins continue to climb higher. 

Corn
December corn futures continue to climb higher, setting a new contract high on a daily basis. Supplies are tight, and that is not currently forecast to change. Corn plantings are estimated by USDA at 91.1 million acres, up less than 1 percent, or 325,000 acres from last year. In Arkansas, intended plantings are pegged at 700,000 acres, up 13% from 2020. 20-21 ending stocks are expected to be tight, so expect to see prices supported through spring. Acreage could, of course, still increase, especially if we see dryer conditions early, but less than ideal temperatures could keep farmers from planting. As of April 11, 4% of the U.S. crop was in the ground.

Soybeans
Soybean planted acreage for 2021 was pegged at 87.6 million acres, up 5% from 2020. In Arkansas, acres are estimated to be 3 million, up 6% from last year. Total acres here were also less than expected. Soybean stocks are also expected to be tight, and traders were expecting to see higher planting intentions to fill demand. Technically, November futures moved to a new high in reaction to the report, and that high of $12.85 is now resistance.

Cotton
All cotton acres are pegged at 12.036 million for 2021, which was mostly in line with trade expectations. Arkansas’ crop was estimated to be 490,000 acres. Drought conditions in West Texas could result in a decrease in acres or increased abandonment if the acres do get planted.  Demand for cotton has rebounded significantly since the lows seen during 2020. The U.S. dollar is relatively soft compared with other currencies, making U.S. cotton more competitive. New-crop December is now trending higher, but resistance at the contract high of 89.28 cents looks solid at this point.

Rice
All rice acres are estimated to be 2.71 million acres, down 11% from last year. Arkansas farmers are expected to plant 1.13 million acres of long grain and 121,000 acres of medium and short grain, for a total of 1.251 million acres, down 14% from 2021. USDA says 23% of the crop is in the ground across the country, and Arkansas farmers have seeded 13% of the crop here.