Livestock and Poultry
In the March Supply/Demand report, USDA lowered their total red meat and poultry production estimate slightly. Beef production was raised on higher fed and non-fed cattle slaughter numbers but was more than offset by lower pork and broiler production estimates. Pork production was lowered on slower slaughter activity and lower carcass weights. Broiler production was lowered on lower slaughter to date and slower recovery in hatchability that was previously estimated. Fed-cattle price estimates were raised as a result of firm packer demand and declining inventories of fed cattle. Hog price estimates were raised on current prices and expected demand strength. Broiler, turkey, and egg price forecasts were also raised in reaction to current prices and relatively slow production growth.

Dairy
The milk production forecast for 2022 was lowered in the March Supply Demand report. Lower dairy cow numbers and slower growth in milk per cow were credited with the reduction. The fat basis import forecast was lowered as imports of cheese and butterfat are expected to shrink. Export forecasts were lowered on slower than expected shipments of whole milk powder and whey. On a skim-solid basis, the import forecast was raised, ad higher imports of milk proteins more than offset weaker cheese imports. Price forecasts for cheese, butter, nonfat dry milk, and whey were raised from the previous month on current prices, lower expected production, and continued demand strength. With higher product prices, both Class III and Class IV prices were raised. The 2022 all milk price forecast was increased to $25.05 per cwt.

Row Crops
Russia’s attack on Ukraine has sent the markets into turmoil. Ukraine exported 14% of the world’s corn last year, and Ukraine and Russia combines accounted for 29% of the world’s wheat exports. Wheat futures have soared, and so have crude oil futures, and other commodities have followed.

Since Mid-February, Chicago wheat futures moved to new all-time highs. However, the July contract charted a huge bearish reversal this week amid technical selling. The March Supply/Demand report delivered disappointing news, with USDA actually raising their 21/22 U.S. wheat carryout estimate by 5 million bushels, cutting exports by 10 million bushels based on the slower pace of export sales and shipments to date.

Corn futures are holding up a bit better than wheat this week. December has resistance at the contract high of $6.54 ¾. A close below the $6.30 area could be a negative signal.

Rice futures have lost ground this week, pressured by the selloff in wheat and bearish changes to the USDA supply/demand balance sheet. The all-rice carryout increased by 1 million cwt. to 34.5 million cwt , and world rice carryout was increased by 4 MMT. May has now closed below $16 two days in a row. The next level of support is near $15.50.

Cotton futures have not been much affected by the invasion of Ukraine. Futures are chopping along mostly sideways after trending sharply higher for over 2 months. December has support at $1.00 for now. The U.S. supply/demand balance sheet was unchanged in the March report.

May soybean futures appear to have charted a top of $17.59 ¼ in late February. The rally was fueled by unfavorable growing conditions in Brazil, but is built into the market at these price levels. November futures have strong support at $14, but their continued inability to close above $15 suggest the market is running out of steam.