Agriculture Market Summary
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TDA Daily Market Summary 2/20/2014

Posted 10 years 120 days ago by

  • ·         Feeder cattle auctions steady to $5 higher; futures lower.
  • ·         Fed cattle cash trade inactive; futures mostly lower; beef prices higher.
  • ·         Cotton lower.
  • ·         Grains mostly higher, except rice futures lower; soybeans lower.
  • ·         Crude oil and natural gas higher.
  • ·         Stock markets lower.

Texas auctions reported feeder cattle prices steady to $5 higher compared to their previous sale, with most $2-$4 higher. Receipts were still relatively light at many locations, a function of the reduced cattle supplies and lingering impacts of the inclement weather over the past couple weeks. Feeder cattle futures were lower in response to higher corn futures. The fed cattle cash trade remained inactive across all major U.S. cattle feeding regions, with asking prices at $145-$146, but initial packer bids at $142. Wholesale boxed beef values were higher again yesterday, which might give cattle feeders a little leverage with packers. A winter storm over Nebraska and Iowa, which comprise the bulk of the Northern Plains feeding area, might impact prices this week. Cattle slaughter continues to run well above week-ago levels, but is still well behind last year. Fed cattle futures were lower, mostly due to speculative profit taking. Traders remain focused on the tight cattle supplies, but just how well beef demand will hold up remains a major question.

Cotton cash prices and futures were lower. Wire service reports noted that Chinese imports during January fell to less than half the December total, but still remain on track to exceed USDA projections by a wide margin. Uncommitted supplies of high-quality cotton remain limited, which helps to support the market, but ample world reserves and expectations for larger U.S. cotton planting this spring continue to pressure prices.

Corn cash prices were 4-5 cents higher per bushel yesterday and grain sorghum was 7-9 cents higher per cwt, but another unusual shift in the price range reported by USDA Market News for the Texas High Plains caused an artificial drop in the calculated average. Corn and grain sorghum prices were solidly higher at elevators that reported both Tuesday and Wednesday, but since USDA included some extremely low quotes in their range on Wednesday, the mid-point of that range dropped a penny for grain sorghum and 9 cents for corn. Corn prices remain under pressure from the large supplies coming out of last year’s record-large crop, but reports of “political problems” in Ukraine and continued decent corn export demand are supportive. The weekly exports report will be released later this morning and USDA is expected to announce their first production projections for the 2014/15 crop at an outlook conference this week. Wheat prices were higher amid ongoing concerns about winter freeze damage, both here and abroad, and transportation issues in Canada.

Stock markets were lower yesterday. The Commerce Department reported that housing starts and building permits fell much more than expected during January, mostly due to bad weather. The Labor Department reported that producer prices increased by 0.2% in January, as expected, while core prices excluding food and fuel were up 0.1%, half the expected 0.2% increase.  There were ongoing concerns about emerging markets due to political unrest in Ukraine and a sharply lower Russian ruble.

This week’s U.S. Drought Monitor (click here for the Texas map or here for the U.S. map and summary) showed little change in overall conditions in Texas, with the area of the state rated as abnormally dry or in drought holding steady at 88%. The areas rated in severe and extreme drought increased, while percentages in other categories declined or remained unchanged. Parts of Northeast, South and West Texas remained drought-free. Nationally, 53% of the contiguous states were reported in some degree of abnormal dryness or drought, down 2 points from a week ago.

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.