There is currently a lot of uncertainty in the market. Extremely wet weather throughout the south continues to keep farmers out of the field, and a wet harvest also means there is a lot of field work that needs to be done. Planting decisions are still up in the air for many farmers who would be planting corn now if they could get in the field. Cost of production and financing will also be a factor as producers in the south decide whether to plant corn, soybeans, cotton, or in some cases rice.
The March Supply/Demand report didn’t contain anything bullish for prices, and the markets have generally acted accordingly. USDA raised the corn carryout by 100 million bushels from the February report thanks to lowered expectations for exports and ethanol demand, pegging the total carryout at 1.835 billion bushels. Technically, December futures are attempting to confirm a double bottom at $3.86 ¼, but the upside will likely remain limited for the time being.
USDA lowered the soybean carryout by 10 million bushels, but that still leaves the estimate at a whopping 900 million bushels. Prices here will likely remain volatile until the U.S. and China finally reach a trade deal. November beans are building support around $9.23, but will have touch resistance at $9.70.
Rice futures have turned more sideways over the past week as May once again failed at resistance at $11, a level that has capped the market for at least three months. USDA is estimating U.S. carryout for 2018-2019 to set at 30-year high.
Cotton prices are chopping along mostly sideways in a narrow range, unable to break through resistance at 74.5 cents. Support is at the recent low of 72.25 cents. Unless the U.S. and China reach a trade agreement, the upside will continue to be limited. The size of the U.S. crop is in question, with cold, wet conditions delaying field prep and planting in the Delta and West Texas in a mild to moderate drought.