Corn
Last week, USDA released their monthly supply/demand report, quarterly grain stocks report, and the Annual Crop Production Report. In the reports, USDA slashed its 2020 U.S. corn crop and 20-21 carryout estimates sharply, sending futures limit-up. They cut their crop estimate by 325 million bushels, the largest cut ever made by USDA in the January production report. The cut is the result of a 3.8 bushel per acre cut from the average yield and a slight cut to the harvested acreage total. Ending stocks are now projected at only 1.552 billion bushels, which brings the stocks to use ratio to a very tight 10.6%. This is despite the fact that they lowered corn-for-ethanol use and exports by 100 million bushels each, and feed residual use by 50 million bushels. The average on-farm price was raised 20 cents to $4.20.  March futures have failed at resistance at $5.40 and have been working lower. This week the market closed the chart gap left between $5.17 and $5.22 on the rally and look like they will build on that support now that the gap has been filled. Expect prices to stay high as the market looks to increase acres for 2021 in order to get back to a more comfortable stocks to use situation.

Soybeans
USDA had big surprises for the soybean market, too. They cut their crop estimate by another 35 million bushels, bringing the crop to 4.135 billion bushels. Exports were raised 30 million bushels and the domestic crush by 5 million. The cuts were partially offset by increases in the old crop carryout and import projections. The net result of the report was projected ending stocks of only 140 million bushels, which is a stocks-to-use ratio of only 3.1%. The average on-farm price was raised 60 cents to $11.15.  On the futures charts, the trend is solidly higher. Old crop March looks to have found resistance between $14.35 and $14.36. The November contract has so far been unable to close above resistance at $12.

Rice
Rice futures also got a boost from a bullish USDA report. A sharp increase in domestic and residual usage evident in the NASS rice stocks report resulted in a 20-21 all-rice carryout of 38.4 million hundredweight. That is a 12.4 million bushel cut from the December report. 2020 production totaled 228 million cwt, up 23% from 2019. The average US yield was pegged at 7,619 pounds per acre. The average on-farm price for long grain rice is pegged at $12.00, up 20 cents from the previous report. The average medium-grain price is pegged at $12.30, up 30 cents from the previous report. Technically, March futures have moved above previous resistance at $13, and are now facing resistance at the recent high of $13.35.

Cotton
Cotton was no exception to bullish reports and subsequent chart action. USDA cut its U.S. cotton carryout estimate by 1.1 million bales, which is more than 19%, due to lower estimated production and stronger expected esports. U.S. production was pegged at 14.95 million bales, down a million bales from the last report. Exports were raised 250,000 bales to 15.25 million bales. The average on-farm price was raised 3 cents per pound to 68 cents per pound. The world cotton carryout was lowered to 96.32 million bales, down 3.56 million bales from a year earlier. Technically, the uptrend on the March chart is still solid and prices are trading at 2 ½ year highs on a front-month basis.

Livestock, Poultry, and Dairy
The 2020 total red meat and poultry production estimate was reduced from last month. Beef production is expected to be lower as cattle slaughter is reduced. The pork production estimate was also reduced on slower slaughter pace that more than offset heavier carcass weights. The broiler production estimate was reduced on recent hatchery and slaughter data. The egg production estimate was unchanged.

For 2021, total red meat and poultry production forecast was lowered from the previous month as lower expected beef, broiler, and turkey production more than offsets higher pork production. Lower placements in late 2020 will impact fed cattle supplies in mid-2021. Cattle carcass weights are forecast lighter for 2021. USDA will release its semi-annual Cattle report on January 29, providing estimates of heifers held for breeding and an insight into the number of feeder cattle available for placement during 2021. The pork production forecast for 2021 is raised from the previous month as higher expected hog slaughter more than offsets lighter expected carcass weights. Broiler, turkey and egg production forecasts are lowered for 2021 as higher feed costs are expected to slow production growth.

The milk production estimate for 2020 and forecast for 2021 are raised from the previous report on higher milk per cow and higher dairy cow numbers. The 2021 all milk price forecast was raised to $17.65 per cwt.