Cattle
December cattle futures continue to show strength, but have yet to overcome resistance at the August high of $114.02. Firmer cash prices and expectations for tighter market-ready cattle supplies during the fourth quarter have been supportive. Feeders are finding support from the live cattle market and solid demand from feedlots. Cattle producers are eligible for the new CFAP 2 program, with payments made on the highest owned inventory of eligible livestock, excluding breeding stock, on a date selected by the producer from April 16, 2020, through August 31, 2020, multiplied by the payment rate of $55/head.

Dairy
Dairy (cow’s milk) production is covered under CFAP 2 as a price loss commodity. Payments will be based upon actual milk production from April 1-August 31 multiplied by the payment of $1.20 per cwt, and estimated milk production from September 1-December 31 based upon the average daily production from April 1-August 31, multiplied by 122, multiplied by a payment rate of $1.20 per cwt.

Hogs
Hog futures have run out of steam after posting significant gains in the early weeks of September. The most active December contract is consolidating after charting a major bearish reversal in mid-September. The good news is that follow-through selling has been limited so far. Key support is at $61.25, and then a chart gap between $60.55 and $59.97. Hog producers are eligible for the new CFAP 2 program, with payments made on the highest owned inventory of eligible livestock, excluding breeding stock, on a date selected by the producer from April 16, 2020, through August 31, 2020, multiplied by the payment rate of $23/head. Contract producers who do not share in the price risk of production are not eligible.

Rice
Rice futures have been a bit unsteady after charting a bearish key-reversal at the end of August. The uptrend that supported the market through August and early September has been violated, but futures are trading in wide ranges and consolidating above support at $12 and below resistance at $12.60. The ongoing harvest will likely limit the potential upside for the time being. Nationwide, the harvest is 57% complete. Arkansas farmers have harvested 57% of the crop, behind the 5-year average pace of 77%. Rice was included in the new CFAP 2 program as a flat rate crop after being left out of the first CFAP. Eligible acres of rice will be multiplied by a rate of $15 per acre.

Cotton
December cotton is trading in a mostly sideways pattern for the time being after finding resistance just below 67 cents. Support is building just above 64.50 cents, and the market is consolidating within that range.  Harvest has begun, and that could keep some pressure on the market. Upland cotton is included in CFAP 2 as a price trigger commodity. Payments based on the price trigger will be the greater of: 1) the eligible acres multiplied by a payment rate of $15/acre; or 2) the eligible acres multiplied by a nationwide upland cotton marketing percentage (46%), multiplied by the upland cotton payment rate ($0.08), and then by the producer’s weighted APH yield.

Soybeans
Soybean futures got a boost this week from the USDA Stocks report. Old crop soybeans in all positions totaled 523 million bushels, down 42% from the previous year. The November contract posted sharp gains on Wednesday, but follow-through strength was limited. The September high of $10.46 ¾ looks like the top for the time being. Soybeans are included in CFAP 2 as a price trigger commodity. Payments based on the price trigger will be the greater of: 1) the eligible acres multiplied by a payment rate of $15/acre; or 2) the eligible acres multiplied by a nationwide soybean marketing percentage (54%), multiplied by the soybean payment rate ($0.58/bu), and then by the producer’s weighted APH yield.

Corn
Corn futures also got a boost from the quarterly stocks report. Corn stored in all positions on September 1, 2020, totaled 2 billion bushels, down 10% from the previous year. June-August disappearance was 3.02 billion bushels, compared with 2.98 billion during the same period in 2019.  In reaction to the report, December futures moved to new 7-month highs. The upside could be limited by harvest pressure as traders work to get a better handle on the size of the crop. Corn is included in CFAP 2 as a price trigger commodity. The nationwide corn marketing percentage is 40%, and the payment rate is $0.58/bushel.