Livestock and Poultry
In the October Supply/Demand report, the forecast for 2021 total red meat and poultry production was lowered from the September report as lower pork, broiler, and turkey forecasts offset a higher beef forecast. Beef production was raised on higher cow slaughter and heavier average carcass weights. The pork production forecast was reduced on lower expected fourth-quarter slaughter rates. Broiler and turkey production forecasts were reduced on recent hatchery and slaughter data, and the egg production forecast was reduced slightly. For 2022, the total red meat and poultry forecast was reduced from the previous month. Although higher expected placements of cattle in the second half of the year are expected to support higher early-year supplies of fed cattle, placements in the first half of 2022 were lowered and fed cattle supplies in the second half of 2022 are expected to be tighter as a result.

USDA’s Quarterly Hogs and Pigs report, released in late September, estimated a lower pig crop for June-August and lower farrowing intentions for September-November. This supports lower hog slaughter expectations for the first half of 2022. Slower expected growth in pigs per litter during 2022 resulted in lower expected hog supplies in the second half of the year.

Broiler and turkey production forecasts were reduced on expectations of a relatively slow response to improving margins. The 2022 egg production forecast was unchanged from the September report. The broiler export forecast for 2021 was raised slightly, while the 2022 report was unchanged. Turkey exports for 2021 and 2022 were lowered from last month.

Dairy
Milk production forecasts for 2021 and 2022 were reduced in the monthly Supply/Demand report. Smaller dairy cow numbers and slower growth in milk per cow were credited with the reduction. For 2021 and 2022, fat basis import forecasts are unchanged from the previous month, while the fat basis export forecasts are raised on stronger expected sales of cheese and butterfat containing products. The skim-solids basis import forecast for 2021 is lowered slightly on weaker expected imports of milk protein concentrates, but the 2022 forecast was unchanged. Skim-solids basis export forecast for 2021 is reduced on weaker sales of skim milk powder, whey, and lactose; however, the forecast for 2022 is unchanged.

For 2021, cheese, nonfat dry milk, and whey price forecasts were raised on current prices and lower expected production. For 2022, all dairy product prices were raised as tighter supplies are predicted. The 2021 and 2022 Class III and Class IV price forecasts were raised from last month as a result. The all-milk price is forecast at $18.45/cwt for 2021 and $19.20/cwt for 2022.

Corn
Corn futures have taken a sharp downward turn this week in reaction to the monthly WASDE report. The recent stocks report raised the beginning stocks estimate for corn, which caused big changes in the supply/demand report. Supplies are up 72 million bushels from last month’s report to a total of 16.28 billion bushels. Beginning stocks were increased to 1.236 billion bushels, and in a move that surprised analysts who were expecting a decrease in production, total production was raised to 15.019 billion bushels due to a bump in the expected average yield. Exports were increased by 25 million bushels. Ending stocks are now pegged at 1.5 billion bushels, but the projected on-farm price remained unchanged at $5.45. December 2021 futures have support at $5. On further weakness, though, bears could target the chart gap left between $4.77 ½ and $4.80 ¾. Weakness in the December 2022 contract has been limited by expectations for a smaller crop next year as input prices soar.

Soybeans
November soybeans have fallen to 6-month lows, only finding support when the reached the March low of $11.84. The trade was caught off-guard by the monthly supply/demand report. The news of beginning stocks of 256 million bushels hit the market in the Stocks Report released at the first of the month. That was an 81 million bushel increase in the beginning stocks estimate. The bad supply-side news continued in the form of a 0.9 bushel per acre increase in yield, resulting in a production estimate of 4.448 billion bushels. That means the supply estimate was 145 million bushels higher than the September estimate. Ending stocks are now pegged at 320 million bushels, up from 185 million last month. The average on-farm price is estimated to be $12.35, down 55 cents from last month’s report.

Rice
Rice futures have recovered from recent losses, which were due mostly to carryover weakness from other commodities and had little to do with rice market fundamentals. There were very few changes in the Supply/Demand report for rice, but a decrease in imports resulted in a decrease in ending stocks, which are now pegged at 33.2 million cwt. The average on-farm price was unchanged at $14.80. Technically, November has support at $3.52 and resistance at $14.

Cotton
USDA cut their cotton yield estimate by 24 lbs/acre, resulting in 510,000 bale cut in the production estimate. Total U.S. production is now pegged at 18 million bales, and total supply is pegged at 21.16 million bales. Ending stocks were cut by 500,000 bales to 3.2 million, and the average on-farm price was raised 6 cents a pound to 90 cents. The December contract set a new high last Friday before closing at the bottom of the day’s trading range. That high of 116.48 cents will likely be tough resistance. The market charted a bearish reversal on Tuesday signaling a long-term top has been charted, but so far, follow through selling hasn’t materialized.