Oct 30 2014

Texas Daily Ag Market Summary 10/30/14 Posted 9 years 178 days ago by

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

Texas feeder cattle auctions quoted prices $3 lower per cwt to $3 higher, with a few as much as $8 lower and some to $5 higher. Feeder cattle futures were mostly lower. The unevenness of the stocker/feeder market is a reflection of the volatility of feeder cattle futures, an up-tick in corn prices, increasing numbers of short-weaned new crop calves, continued strong demand for yearlings and reluctance of buyers to keep paying record-high prices. The fed cattle cash trade remained at a standstill yesterday across all major U.S. cattle feeding regions. Sellers are holding firm at $172-$173 per cwt, versus a few packer bids at $168 and last week’s average of $170. Wholesale boxed beef values were higher yesterday. Estimated cattle harvest so far this week totals 329,000 head, down 12K from last week and 33K lower than a year ago. Fed cattle futures were lower.

Cotton cash prices and futures were higher again yesterday. Increasing harvest-time supplies continue to pressure the market, but producers are understandably reluctant to sell at current prices, which has limited available supplies. Traders are also looking for improved export data this week. Weather services report a light freeze at Olton and Muleshoe, but both locations were already about a week past their average first freeze date. Lubbock’s average first freeze date is tomorrow, but it has not had a freeze yet and none are in the forecast. In fact, temperatures hit 91 at Lubbock “promoting maturity of late-planted cotton.” Forecasts are calling for warm, sunny weather in the region through Sunday.

Corn and grain sorghum prices followed soybeans and outside markets higher. A weaker dollar, firmer crude oil prices, higher ethanol production and lower ethanol stocks were all supportive. Good harvesting weather and increasing new-crop supplies, along with reports of good planting weather in South America, kept a lid on the gains.

Wheat followed row crops higher, with the weaker dollar and dry conditions in Australia and Russia providing a little additional support.

This week’s U.S. Drought Monitor (click here for the Texas map or here for the U.S. map and summary) showed another decline in conditions in Texas with 75% of the state now in some degree of drought or abnormal dryness, up five percentage points from a week ago. The drought is not as intense as it was at this time last year, but the five point increase in coverage this week indicates just how fragile conditions are. Nationally, the total acreage experiencing abnormal dryness or some degree of drought improved by one point to 43% percent of the contiguous states.

Stock markets closed modestly lower yesterday after the Federal Reserve “brightened its economic outlook, leading some investors to think monetary policy will be less supportive than expected.” The Fed said it would end its bond purchases at the end of this month, as expected, and that the labor market was improving, but that there was some risk of higher inflation. The improved assessment of the economy stoked fears that the central bank will start raising interest rates sooner than expected, in spite of its assurances otherwise.

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.