Texas Daily Ag Market Summary 10/13/14

Posted 9 years 195 days ago by

USDA released its monthly Crop Production report and World Agricultural Supply & Demand Estimates (WASDE) on Friday. Highlights are incorporated into the commodity comments below. The Texas Crop Production release includes state highlights and district-level forecasts.

Feeder cattle steady to $5 higher, few $10 higher; futures lower.
Fed cattle cash trade $2 higher; formula trades $1 higher; futures mostly lower.
Choice beef prices higher; Select-grade lower.
Cotton cash prices unchanged; futures mostly lower.
Wheat, soybean meal higher; corn, grain sorghum, rice, soybeans lower.
Crude oil and natural gas higher.
Stock markets lower.

Texas feeder cattle auctions quoted prices steady to $5 higher, with one location $10 higher on lighter-weight heifers. Feeder cattle futures were lower. The fed cattle cash trade was $2 higher on Friday and formula trades were almost $1 higher. Wholesale beef values were higher for Choice cuts, but lower for Select-grade offerings. Estimated cattle harvest for the week totaled 562,000 head, down 15K from a week earlier and 47K below a year ago. Fed cattle futures were mostly lower. Limited cattle and beef supplies continue to support prices across the sector, but futures dipped a little lower because of higher corn futures and another sell-off on equity markets.

Cotton cash prices were unchanged, but futures were mostly lower after USDA released a mixed bag of numbers. The U.S. cotton production forecast was lowered by 2% from last month and was well below the range of pre-report expectations at 16.26 million bales, but is still up 26% from a year ago. All of the reduction came out of Texas, where the production forecast totaled 6.25 million bales, down 5% from last month (350,000 bales), but still 50% higher than a year ago. Cool, wet weather has reduced yield potential on the 80% of the crop that is still standing for harvest. U.S. projected cotton ending stocks were held unchanged, but world stocks increased. The U.S. export forecast was held unchanged in spite of expected lower foreign imports “as demand for U.S. cotton is likely to be sustained.”

Wheat prices were higher on Friday after U.S. and world projected ending wheat stocks both came in on the low side of pre-report expectations. On the U.S. balance sheet, higher production was more than offset by higher feed use and residual and higher exports. Globally, higher production was also more than offset by higher consumption and higher international trade.

Corn and grain sorghum prices were lower after USDA raised its corn production forecast by 1% from last month to 14.5 billion bushels. The increase was a little less than expected, but any increase is bearish, especially when it adds to an already record-large crop. U.S. and world projected corn ending stocks were also higher than last month, but on the low side of expectations. Texas corn production is expected to total 285.65 million bushels, up 8% from last month and 4% higher than a year ago. Texas grain sorghum production was forecast at 121.8 million bushels, down 23% from last month and 5% lower than last year.

Stock markets were lower again on Friday as investors continued to reduce riskier holdings. The tech-heavy Nasdaq Composite posted a 2.3% drop, the largest percentage decline among the major indexes, after chipmaker Microchip Technology said it will report lower revenues for the third quarter. “Defensive” utility and consumer-staple stocks were higher.

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.

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