Oct 27 2014

Texas Daily Ag Market Summary 10/27/14 Posted 9 years 182 days ago by

USDA released its monthly Cattle on Feed report on Friday afternoon. Highlights below.

• Feeder cattle $3 lower to $5 higher; futures lower.
• Fed cattle cash trade $6 higher; formula trades $1 higher; futures lower; beef prices lower.
• Cotton cash unchanged; futures higher.
• Grains and soybeans lower.
• Crude oil lower; natural gas higher.
• Stock markets higher.

Texas feeder cattle auctions quoted prices $3 lower per cwt to $5 higher, with a few as much as $10 higher. Texas direct feeder cattle sales were also uneven – weak to $4 lower early in the week, but steady to $5 higher later. Feeder cattle futures were lower. Feeder cattle futures were lower as traders worried that the expected higher feedlot placements in Friday’s USDA Cattle on Feed report could take the focus off the very tight available supplies. The fed cattle cash trade was $6 higher for the week in relatively active trade to a new record high $170 per cwt and formula trades were higher again Friday. However, wholesale boxed beef values were lower. Estimated cattle harvest for the week totaled 579,000 head, up 11K from last week, but down 43K from a year ago. Cumulative cattle harvest for the year is running 7.1% lower. Fed cattle futures were lower ahead of Friday’s USDA Cattle on Feed report as traders braced for a possibly-bearish report.

USDA NASS released its monthly Cattle on Feed report Friday afternoon and it should have little impact when markets open this morning, with the national numbers matching pre-report expectations. The number of cattle in feedlot totaled 10.1 million head, down 1% from a year ago. Placements on feed were up 1% and marketings were down 1%. In Texas, cattle on feed totaled 2.47 million head, up 1% from a year ago. Texas remains the number on cattle-feeding state in the nation.

Cotton cash prices, but futures were higher. Higher equity markets helped. In addition, traders noted that producers are reluctant to sell at current prices levels, which are about 20% lower than they were at this time last year. That has limited the marketable supply of new-crop cotton from what is still expected to be an abundant harvest. The USDA NASS Cotton Ginnings report showed nearly twice as many bales ginned so far this season, despite the fact that harvest is running a little behind normal. India reported that, because of low prices, it has started to buy domestic cotton under its price support programs.  

Wheat prices followed corn and soybeans lower, with added pressure from Thursday’s weak export sales report. There have not been any major problems getting the U.S. winter wheat acreage seeded and the crop has received beneficial rainfall. Dry weather in Australia is an ongoing concern, but not enough to offset the large current world supplies and good growing conditions elsewhere.

Corn and grain sorghum prices were lower as harvest progress is expected to improve with more open weather in the forecast for much of the Midwest. Traders also noted speculative profit-taking on the underlying futures contracts.

Stock markets were higher on Friday thanks to better than expected earnings and revenues from both Microsoft and UPS. Amazon fell after reporting worse than expected earnings on higher sales.

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.