Rice
Rice futures have been volatile in recent weeks. After setting a 2½ year high of $18.20 on a front month basis the day after Thanksgiving, the nearby January contract has fallen to $17.03½. There isn’t much chart support above the contract low of $16.28. After a strong month of exports to a diverse array of customers, the most recent weekly export total was a disappointing 25,300 metric tons. The stronger dollar and low water levels on the Mississippi are both having an impact on rice exports. Carryover weakness from wheat futures is also a negative factor and combined with the weakness in wheat suggests that concerns about global food security could be easing.

Cotton
Cotton futures have also been somewhat volatile as March becomes the lead contract. Technically, the market has support at 70 cents and resistance at the recent high of 90 cents. Demand, or the lack thereof, is the driving factor in the market. Last week’s light export sales total was at least better than the previous week’s report, which showed net cancellations. The stronger dollar and week domestic use are both negative factors. Unrest in China over strict Covid restrictions have impacted demand from that country.

Soybeans
Soybean futures continue to trend mostly sideways. Last week’s weakness was triggered by sharp losses in vegetable oils across the world, and those losses carried over into soy oil futures. January has support at the recent low of $14.06. USDA is estimating the season average price to be $14, which means this market does still have downside potential. Crop conditions in South America are a mixed bag. Portions of Argentina are hot and dry, but overall the crop in Brazil is in good shape and receiving timely rains. Indications that Covid restrictions will ease in China are bringing some optimism to the market that demand will pick up. Year-to-date export inspections are down 10.9% from the year ago total, prompting the industry to expect an increase in ending stocks in the next report.

Corn
Corn futures appear to have topped in October and are working their way lower. March futures now have little support above the August low of $6.11½. Slow export sales and shipments have added pressure. Last week’s report did show a slight uptick in inspections to 20.6 million bushels. Year-to-date inspections, though, are down 32.7%.

Dairy
In the most recent Supply/Demand report, USDA raised the milk production forecast for 2022 from last month, while 2023 production was unchanged. The dairy cow inventory for both years was lowered on recent published data but milk output per cow was raised.

For 2022, forecasts for butter, cheese, and nonfat dry milk (NDM) prices were lowered on current prices and larger milk supplies. Whey prices were unchanged. Both Class III and Class IV prices were lowered on weaker product prices. For 2023, the price forecast for butter was raised, but was lowered for cheese and NDM, while whey prices were unchanged. With lower cheese and NDM prices, Class III and Class IV price forecasts were lowered. The 2022 all milk price forecast was lowered to $25.50 per cwt and the 2023 all milk price was lowered to $22.60 per cwt.

Livestock and Poultry
In the latest Supply/Demand report, USDA raised 2022 red meat and poultry production from last month as higher beef and broiler forecasts for the fourth quarter were partly offset by lower pork and turkey forecasts. Beef production was raised with higher expected cattle slaughter as well as higher carcass weights. Pork production was lowered on a slower expected pace of slaughter. Broiler production was raised on current slaughter and hatchery data. Turkey production was lowered based on tighter bird supplies. Egg production was lowered from last month on recent hatchery data.

For 2023, the beef forecast was lowered on tighter supplies of fed cattle and lower cow slaughter. Broiler production was raised on expected growth in broiler flocks. Turkey production was lowered slightly for the first two quarters. Egg production was reduced as slower expected growth in production in late 2022 was carried into the first part of 2023.

Cattle price forecasts for 2022 and 2023 were raised on stronger than expected demand. The 2022 hog price forecast was raised on prices to date; 2023 prices were unchanged. The broiler price forecast for 2022 was lowered on recent data, but 2023 forecasts were unchanged. Turkey price forecasts for both 2022 and 2023 were raised with lowered expected production. Egg price forecasts for 2022 and 2023 were raised on recent prices and expectations of continued firm.