Livestock and Poultry
The May Supply/Demand report contained the first estimates for 2023 production. Total U.S. red meat and poultry production is forecast to be below 2022, as lower beef production more than offsets higher pork and poultry production. For 2023, beef production was forecast lower with expected declines in both fed and non-fed cattle supplies. Pork production was forecast higher with increased farrowings and continued growth in productivity. Higher forecast broiler production reflects moderating feed costs and improved productivity. Turkey production is projected higher as the sector recovers from the 2022 Highly Pathogenic Avian Influenza (HPAI) outbreaks. Egg production is also forecast higher as farmers rebuild flocks.

Total red meat and poultry production forecasts for 2022 were raised from last month. Higher beef and broiler production more than offset a reduction in pork and turkey production. Beef production is raised, with more cattle placed in feedlots sooner than normally expected due to drought conditions, supporting higher annual fed cattle slaughter. Additionally, cow slaughter is forecast higher. Pork production was reduced on lighter expected carcass weights. Based on recent slaughter and hatchery data, the broiler production forecast was raised while the turkey production forecast was lowered.

For 2022, the cattle price forecast was raised on recent data and tighter expected fed cattle supplies later in the year. Hog prices were lowered on prices to date and weaker demand. Broiler and turkey prices were raised on stronger prices to date and continued demand strength.

Dairy
The 2022 milk production forecast was raised from the previous report, with higher milk cow inventories more than offsetting slower growth in milk per cow. Cheese and butter prices were raised from the previous report on strong demand, but non-fat dry milk and whey prices were lowered. The Class III price as unchanged and Class IV was lowered. The 2022 all milk price was forecast at $25.75/cwt.

In the first estimate for 2023, USDA projected 2023 milk production will outpace 2022 production, driven by gains in milk per cow, with the milk cow herd expected to be about the same as the 2022 herd. Exports on a fat basis were forecast lower, largely on lower expected butter sales. The 2023 all milk price was forecast at $23.55/cwt.

Corn
Corn futures have collapsed this week, under pressure from good crop progress and favorable weather forecasts for the near-term. As of May 31, USDA says 86% of the corn crop is in the ground and 61% has emerged. December futures closed below $7 on Wednesday, which could spark additional selling. There is little support above $6.30 at this point.

Soybeans
November soybeans posted a huge bearish reversal to begin the week on Tuesday. Futures moved to a new high of $15.60 ½ before closing sharply lower. Follow through selling has been limited so far, but further weakness in corn and wheat could carryover into soybeans. The crop is off to a good start despite early delays. Arkansas farmers are 78% planted, ahead of the 5-year average of 72%, while nationwide 66% of the crop is in. Demand for soybean oil remains a bright spot in the market, providing some underlying support.

Rice
Rice futures remain in an uptrend, but have fallen back from recent contract highs. U.S. planting is mostly done, with farmers catching up late in the season. Weak export demand continues to be a negative factor. Concerns about food security have been supportive, but with exports from Ukraine set to resume and farmers there back in fields in some instances, those concerns are waning and carryover weakness from wheat futures has impacted rice prices as well.

Cotton
Cotton futures look like a top has been put in. December is now trading around 15 cents below the contract high of $1.33 set in mid-May. West Texas has received much-needed rains in recent weeks, potentially lowering the number of acres that will be abandoned and raising the yield potential of other acres. Export demand has been week, also adding to the negative undertone.