MARKET NEWS

as of July 5, 2023

Contact Brandy Carroll brandy.carroll@arfb.com

Tyler Oxner tyler.oxner@arfb.com

Rice

The June 30 planted acreage report was a little bit bearish for rice. Total U.S. acreage was pegged at 2.687 million acres, up 104,000 from the 2.583 million acres reported in the March planting intentions report. Arkansas plantings were up 10,000 acres from March intentions of 1.301 million acres to 1.311 million. The biggest increase was in California, which added 74,000 acres to their planting intentions for a total of 478,000 acre. Export demand remains disappointing, adding to the negative undertone. September futures have broken out of the recent uptrend but have found support at last week’s low of $14.69. There is additional support at $14.30. Resistance begins at $15.86.

Soybeans

New crop soybeans have moved higher after a rough previous week. Volatility in both directions in the past few weeks comes from traders attempting to balance the latest weather trends against an unexpected set of USDA acreage data. USDA showed much lowerthan-expected acres in their most recent report. The 2023 planted area is now estimated at 83.5 million acres, down 5 percent. According to the USDA, planted acreage is down or unchanged in 21 of the 29 estimating States. Soybean conditions also dropped a point, with 50% of the crop being rated Good/Excellent for the U.S. and is the lowest since 2012. Arkansas soybean conditions are currently at 58% Good/Excellent with only 11% being Poor/Very Poor.

Corn

New crop corn has steadily moved lower in the recent weeks as prices continue to look for new supply and demand signals. The most recent USDA acreage report brought more bearish news after reporting planted acreage is up 6% from 2022. It is estimated that this year there is 94.1 million acres planted, which is up 5.52 million acres from last year. According to the USDA this represents the third highest planted acreage in the United States since 1944. Compared with last year, planted acreage is expected to be up or unchanged in 43 of the 48 estimating States. Arkansas corn condition fell 5% from the previous week now reporting 72% of the crop is in Good/Excellent condition. However, the U.S. rating shifted slightly higher with 51% of the crop now rated in good-to-excellent condition. It should be noted that this is the lowest rating since 2012.

Cotton

New crop cotton has been in a volatile state since December of 2022, being range-bound between 77 cents and 85 cents. This could lead to a breakout or a breakdown if the price moves above the resistance or below the support. The recent acreage report showed all cotton planted for 2023 is down 19 percent from last year, estimated at 11.1 million acres. Upland area is estimated to be down 19% while American Pima is estimated to be down 40% from the previous year. The nation’s cotton crop is rated 48% Good/Excellent compared to the previous 49%.

Wheat

Wheat prices have taken a hit in recent weeks as global supplies have increased. This could change as the Black Sea shipping deal is up for expiration on July 18. Winter wheat ratings have shifted slightly last week, with the conditions moving up or down a point for all ratings. Wheat harvest continues to move forward with 37% of the crop being harvested across the U.S., while Arkansas is wrapping up with 93% harvested.

Hogs

Nearby hog futures continue to trend higher. Seasonal strength wholesale pork prices have carried over into cash and futures prices. Wholesale pork prices do usually make a top in mid-July, so that strength could be short-lived at this point. For now, though, packer margins are solidly in the black. Shrinking U.S. frozen pork stocks is also supportive. USDA reported that stocks dropped by 7.3% during May. Deferred contracts aren’t faring as well as the nearby contracts, having charted a bearish key reversal and falling below uptrending support. This could be a signal that a significant top has been put in for the October and December contracts.

Cattle

Live cattle charts are looking bullish, nearby futures have turned higher and are in position to challenge the early June reversal high. For August, that’s $178.10, and for October, $180.17 ½. More deferred contracts have already moved to new contract highs, suggesting a new leg-up. The USDA Cattle on Feed report was slightly bearish for nearby months, but projections for U.S. cattle supplies to tighten in 2024 provided support for those deferred contracts.

Editor

Ashley Wallace ashley.wallace@arfb.com