FSA DEADLINE FOR ARC AND PLC ENROLLMENT IS MARCH 15
Producers who have not yet enrolled in ARC or PLC for 2019 need to make an appointment to begin the enrollment process prior to March 15, 2020. Farmers can also enroll for 2020 during the same visit but have until June 30 to finalize 2020 elections. The 2018 farm bill provides a one-time opportunity to update PLC payment yields, which could prove beneficial to producers.
Corn futures look to be confirming a bottom, although old crop contracts are looking stronger than new crop at this point. The initial USDA acreage estimate of 94 million acres, up from 89.7 million a year ago, is, of course, weighing heavy on new crop futures. Coronavirus will likely continue to cause market instability in commodities just as it has in the stock market. The Phase I trade deal with China took effect February 14, but their need to deal with coronavirus has limited their ability to meet their commitments. There continue to be concerns about corn demand there when exports resume, as African Swine Flu has caused a significant decline in their hog herd. Old crop March will have resistance at the recent high of $3.94, while December is currently being capped at $3.86 ¾.
The trade in rice futures has been erratic over the past couple of weeks. May looks to have topped out at the 5 ½ year high of $13.98. After a sharp selloff, the market found support at $13.30 and is attempting to build on that level. The longer-term weekly continuation chart still shows a steep uptrend for rice futures. However, the initial USDA supply/demand projections for rice paint a more bearish picture, especially if the weather cooperates. Acreage is projected to be up over 600,000 acres and production is forecast to be up 47.8 million hundredweight, resulting in the highest ending stocks number in over 20 years.
Soybeans appear to be confirming a bottom. November has bounced off support at $9 and the market is testing resistance at $9.25. The data coming out of USDA’s annual Outlook Forum was not particularly bullish for soybean prices. Soybean acreage is estimated to be 85 million acres, up from 76.1 million, and soybean prices are expected to average $8.80 per bushel, however, a lot can happen and those estimates will certainly change. In the meantime, the large Brazilian crop and worry about coronavirus and when China will begin to buy beans are largely built into the market at this point.
Sharp losses in cotton futures over the past two weeks had left the market extremely oversold and due a rebound. The coronavirus and its potential impact on demand for cotton sent new-crop December into a tailspin that resulted in a 9-cent drop in prices in 7 trading days. The market found support at 61 cents earlier this week, but is struggling to overcome resistance at 66 cents. Weekly export sales have remained solid despite worries of large cancellations and coronavirus. The week ended February 27 showed sales of 395,500 running bales, up 84% from the previous week and a new marketing year high.
Cattle futures have largely followed the stock market over the past few weeks, charting huge losses in the process. The April contract lost 9% of its value during the last week of February. Friday’s low of $107.47 ½, however, looks to be the bottom for now, as the market has moved higher this week. The market is extremely oversold, but demand expectations are still being limited by concerns about coronavirus for the time being, and production remains adequate to meet demand, and the February 1 feedlot inventory was the largest in 12 years.
Hog futures continue to be under pressure. The market is concerned about demand, especially from China as coronavirus continues to spread. The most-active April contract has support at the recent low of $61 and is working to build on that. However, there is technical resistance above $67, and this market could retest the low if export demand doesn’t improve.