Cattle futures prices have stabilized somewhat in recent weeks, but a seasonal top is expected after Memorial Day. The monthly Cattle on Feed report brought about a negative reaction. The May 1 feedlot inventory was pegged at 104.7% of last year’s total, which was higher than last year’s total. It is thought that drought is driving cattle into feedlots in some areas. Packer margins are still over $700/head, which would have been considered astronomical a few years ago. Six ag groups, including American Farm Bureau, are working together to seek financial stability for cattle feeders and cow-calf producers and discussing the consolidation in the beef packing industry. They are calling for pricing transparency from packers.
Hog futures have recovered from recent losses and have moved to new contract highs. Expectations are for tighter hog supplies this summer and remain tight this fall were supportive. The wholesale pork market is expected to weaken after the holiday, which will shorten the production schedule. Poor operating margins are also a factor.
Corn futures have not only stabilized but have seen remarkable strength this week. Weekly export sales came in at 246 million bushels, of which 21.9 million bushels were for delivery in 2020-21. The sale included 6.6 million bushels of new sales to China, along with sales of more than 222 million bushels for 2021-22 delivery. Shipments were an impressive 72.8 million bushels. Farmers have now seeded 90% of expected corn acres, well ahead of the 5-year average of 80%. Dryness in the northern plains remains a concern, but weather forecasts are generally favorable for crop development for the next week.
Soy oil futures have confirmed a top, and weakness in that market has carried over into soybeans. The market has been working lower, but late this week November looks to have bounced off support at $13.25 to move higher. Weekly export sales were lackluster at 11.2 million bushels. USDA says that 75% of the U.S. crop has been seeded, outpacing the 5-year average of 54% as farmers rush to get beans in the ground. Arkansas farmers have planted 71% of the crop here, ahead of the 5-year state average of 66%. The weather forecast is generally favorable for crop development, and therefore not necessarily providing support for futures.
Cotton futures continue to trade in a mostly sideways pattern for the time being. December is consolidating between the recent low of 81 cents and resistance near 84 cents. Farmers have seeded 49% of the crop nationwide, while Arkansas farmers have seeded 71% of the crop here. West Texas farmers have seen some drought relief arrive, and more precipitation is forecast for the next week. The drought remains extreme in some counties, though.
Recent selling pressure in rice futures has eased this week as the market has moved in a more sideways pattern. World supply is comfortable right now, and concerns about global food security during the pandemic have faded. Old crop July has again found support near $13.10. USDA says 95% of the crop is in the ground across the country. Arkansas farmers have seeded 93% of intended acres. 78% of the Arkansas is rated good to excellent, while 71% of the crop nationwide is rated good to excellent.