Rice
Rice futures charted a huge bullish outside trading day to open the week. Weakness in the dollar and carryover strength from other markets helped fuel the rally. Follow-through strength on Tuesday resulted in prices trading back above $15. A close above that level could signal a retest of resistance in the $15.35 area for September. However, harvest is underway and that is likely to limit the upside potential of the market. As of August 18, Arkansas farmers had harvested 9% of the crop, while 21% of the crop nationally is in the bins. 79% of the remaining crop is rated good to excellent. In the August production and WASDE reports, USDA reduced the production estimate to 220.8 million cwt, with the long-grain crop estimate lowered to 167.2 million cwt. 2024/25 long-grain ending stocks were lowered to 23.2 million cwt, down from 24 million in the July report, but up from 2023/24 ending stocks of 17 million. The 2024/25 long-grain average price was unchanged this month at $14.50.

Cotton
Cotton finally received a bit of good news in the August production and WASDE reports. USDA cut its U.S. production estimate to 15.1 million bales, down from 17 million bales in the previous report. The reduction was due to a lower harvested acreage estimate and a cut to expected yield. USDA now estimates the average yield to be 840 lbs/acre. That’s down from 844 lbs/acre in the previous report and an average of 899 lbs/acre for the 2023 crop. A 1 million bale reduction in projected exports partially offset the reduction in production, resulting in a 800,000 bale reduction in the 2024/25 carryout estimate, which is now pegged at 4.50 million bales. However, USDA again lowered the 2024/25 average on-farm price estimate to 66 cents/lb. Cotton futures continue to trend lower, but have posted modest gains this week. A close above 70 cents would be a positive sign, and there is technical resistance at 71 cents and 73 cents that would become the next upside objectives.

Corn
September and December corn prices set a new contract low last week, but the USDA supply/demand balance sheet shows corn supplies are less burdensome than wheat and beans. The big news from the August WASDE for corn was the increased projected yield, which has now reached record levels, at 183.1 bushels per acre. This yield increase was largely offset by a decrease in acreage (down 728,000 to 82.7 million), bringing projected production to 15.147 billion bushels, slightly above expectations. While traders and fund managers are looking at the higher yields, the weather forecast does not look the best for finishing the crop for much of the corn belt. For all but the Northern Plains, the forecast looks to turn hotter and drier with a ridge setting up in the central Midwest. For the near term both September and December contracts have support at the low set last week (Sep24 $3.67/Dec24 $3.90). Resistance for both contracts is at the 50-day moving average (Sep24 $4.05/Dec24 $4.20). The Crop Progress report continues to be unchanged showing that 67% of the crop is in good to excellent condition, still well above average.

Soybean
Bearish fundamentals remain a significant problem for the bean market, and USDA’s record yield projection and ballooning new crop U.S. carryout will keep sellers active on rallies. Like corn, U.S. soybeans were also forecasted to have record setting yields at 53.2 bushels per acre. Harvested acres are now projected to increase by 1 million to 86.271 million, contrary to expectations of a 150,000-acre reduction. This is expected to result in a record production of 4.589 billion bushels. Warmer and drier forecasts look to be ahead for most of the northern belt. Should this pattern continue into late August and early September we could see yield prospects decline. Just like corn, soybeans put in a new contract low of $9.55. This low will now be considered support while the 50-day moving average of $10.64 being resistance. Soybean conditions remained at a favorable 68% good to excellent, while traders were expecting a small decline, which is typical for this time of year.

Livestock and Poultry
In the Augusts WASDE the forecast for 2024 beef production estimates were increased on higher slaughter totals that offset lighter weights. Pork production was reduced on lower slaughter and reduced weights. Broiler and egg production estimates were raised for the end of 2024, reflecting recent production and hatchery data, while turkey production was lowered. Price forecasts for 2024 were raised for cattle, hogs, broilers, and eggs, reflecting higher than expected prices through July.

Dairy
The milk production forecast for 2024 was lowered in the August WASDE. Import estimates for fat and skim solids were reduced from last month. The price forecasts for 2024 cheese, NDM, and whey were all raised on recent price strength. The all milk price was raised to $22.75/cwt.