Jul 30 2014

Texas Daily Ag Market Summary 7/30/14 Posted 9 years 266 days ago by

• Feeder cattle mostly $2-$10 higher; futures higher.
• Fed cattle cash trade inactive; formula trades $1.50 higher; futures lower; beef prices new record high.
• Cotton lower.
• Grains and soybeans mostly lower, except rice futures higher.
• Crude oil lower; natural gas higher.
• Stock markets modestly lower.

 

Texas feeder cattle auctions quoted prices mostly $2-$10 higher per cwt, with a few steady and few as much as $20 higher. Prices continue to fluctuate around record highs as tight supplies and strong beef demand still support the market. Feeder cattle futures were higher. The fed cattle cash trade was inactive yesterday, but formula trades were $1.50 higher on a dressed basis. Wholesale boxed beef values were again higher to fresh record highs. Estimated cattle harvest through Tuesday totaled 223,000 head, down 6K from last week and 19K lower than a year ago. Fed cattle futures were again lower for nearby contracts, but higher for contract months after the first of the year.

A federal appeals court yesterday upheld U.S. country of origin labeling (COOL) requirements, though wires services said the rules “could still face obstacles before the World Trade Organization (WTO), which has been weighing whether the regulations comply with international standards.”

Cotton cash prices and futures were lower as rain showers on the Texas Plains, and forecasts for more, boosted crop prospects. Not much rain fell, but it was enough to pull market sentiment lower. Wire services also reported that a cotton round table discussion at a marketing conference said that U.S. cotton production could be 1 million bales (6%) higher than the current USDA forecast. Those remarks added to yesterday’s price slide. On the plus side, a major U.S. consumer sentiment index was higher, suggesting cotton demand might improve.

Wheat prices were lower as large world supplies and weak demand continued to pressure the market. Concerns are building about harvest delays in Europe and dry conditions in Australia, but most of the U.S. winter wheat crop has been harvested and spring wheat is looking good.

Corn and grain sorghum prices were also lower as conditions remain favorable for a large U.S. crop this year. Much of the Corn Belt remains cool and dry, with some concerns about it getting too dry in a few locations. However, many observers are expecting above average yields unless something drastic happens soon to turn prospects around. On a more bullish note, USDA said that Columbia bought 147,000 metric tons of new-crop corn.

 

Stock markets closed modestly lower yesterday after the European Union agreed to place additional sanctions as Russia over its actions in Ukraine. The move will certainly raise tensions, but it’s too early to tell what economic impact it might have on U.S. companies doing business in Russia. Reports also noted that investors put some activities on hold ahead of major economic reports  later this week. Later today, the Federal Reserve will issue its monetary policy statement and preliminary second quarter GDP will be released. The fed is likely to further reduce its monthly bond purchases and may give some additional guidance on when it might start raising interest rates. One fund manager said that GDP growth comes in less than 3%, “the market will view that as a negative.” NOTE: The Commerce Department just reported that second quarter GDP rose by 4%.

Disclaimer: The information compiled in the Daily Market Summary is obtained from a variety of sources, including those available on the Internet, that are believed to be reliable and accurate, but are in no way guaranteed. This information is intended to provide only a summary of market trends and a daily snapshot of agricultural markets and economic indicators. It should not be relied upon as a sole source of market information. Commentary is the author’s alone and does not in any way convey official TDA policies.