Oct 24 2014

Texas Daily Ag Market Summary 10/24/14 Posted 9 years 186 days ago by

• Feeder cattle mostly steady to $2 lower; futures higher.
• Fed cattle cash trade Texas $6 higher; formula trades higher; futures higher; beef prices lower.
• Cotton cash prices unchanged; futures mostly slightly lower.
• Grains and soybeans mostly unchanged to higher.
• Crude oil higher; natural gas lower.
• Stock markets higher.

Texas feeder cattle auctions quoted prices mostly steady to $2 lower per cwt with one location $4 higher on a portion of its offerings. Feeder cattle futures were higher. The fed cattle cash trade shot up $6 per cwt to a new record high $170 per cwt. Reports noted that quite a few cattle were prices earlier in the week at $2 over the market top, which would put them at a very robust $172 per cwt. (I would not be looking for prices in your local grocer’s beef case to drop significantly any time soon.) Wholesale boxed beef values were lower. This is normally a good time of year for beef demand as retailers and consumers begin to stock up for the holidays. Estimated cattle harvest through Thursday totaled 449,000 head, up 4K from last week, but down 40K from a  year ago. Fed cattle futures followed cash markets higher. 

Beef export sales for the week totaled 7,600 metric tons (MT), down 5% from the previous week and 34% below the prior four-week average. South Korea, Hong Kong and Canada were the top buyers. Export shipments totaling 14,600 MT were up 2% from a week earlier and 5% higher than the average. Japan, Hong Kong and South Korea were the leading destinations. Cumulative exports so far this calendar year are running 1.4% behind a year ago.

Cotton cash prices were unchanged, but futures were mostly slightly lower, with only the nearby December contract posting a very modest gain. In what should have been somewhat bullish news, the China Cotton Association lowered its estimate for current year production, bringing it in line with USDA projections. On the down side, cotton export sales and shipments both came in lower than the weekly averages needed to meet USDA projections for the marketing year. Cotton export sales totaling 78,800 bales were up more than 11 times higher than the previous week, but down 31% from the prior four-week average. Indonesia, China and Vietnam were the primary buyers. Exports of 98,100 bales were up 49% from a week earlier and 26% higher than the average. Indonesia, China and South Korea were the top destinations.

Wheat prices were unchanged from a day earlier. Higher corn and soybeans continue to support wheat, but on its own, the crop is pressured by large global supplies and lackluster demand. Weekly export data came in well below expectations. Wheat export sales for the week totaled 229,400 MT, down 34% from the previous week and 39% lower than the prior four-week average. Japan, the Philippines and South Korea were the leading buyers. Export shipments of 431,700 MT were down 11% from a week earlier and 21% lower than the prior four-week average. The Philippines, Japan and Taiwan were the primary destinations.

Corn and grain sorghum prices were higher. Traders remain concerned about the slow progress of this year’s corn harvest, and higher equity markets and an up-tick in crude oil prices were also supportive. Corn export sales and shipments were down from both the previous week and the average, but volumes were still high enough to provide some market support. Corn export sales of 1,031,200 MT were down 46% from last week’s total and 1% lower than the prior four-week average. Unknown destinations, Japan and Jamaica were the leading buyers. Exports totaled 676,700 MT, down 25% from the previous week and 24% lower than the average. Mexico, Columbia and Japan were the  top destinations.

The USEPA’s proposed expansion of its Waters of the U.S. (WOTUS) rule “passed a crucial test Thursday, gaining the approval of the agency’s internal review board.” The board said the rule has a sound scientific basis. Agricultural interests are extremely concerned that the proposed rule will significantly increase government regulation of farm and ranch activities.

Stock markets were higher yesterday “as better-than-expected third-quarter profit reports have combined with reassuring data on the U.S. economy.” Stronger than expected quarterly results from Caterpillar, 3M and Comcast contributed to the increase. After markets closed for the day, Microsoft reported higher than expected quarterly profits and revenues. A Chinese manufacturing index came in higher than a month ago. The Index of Leading Economic Indicators and a U.S. manufacturing index were higher than expected. On the down side, weekly unemployment claims were higher than expected and the previous week’s total was revised higher. Also, the Kansas Coty Federal Reserve Bank manufacturing index came in lower than expected.

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.