2014

Posted 10 years 298 days ago by

Feeder cattle mostly steady, few $3-$8 higher; futures lower.
Fed cattle cash trade $2 lower; futures lower; beef prices higher.
Cotton lower.
Corn and grain sorghum lower; wheat higher; soybeans higher.
Crude oil and natural gas lower.
Stock markets near unchanged.

Texas auctions reported feeder cattle prices were mostly steady compared to a week ago, though one North-Central Texas auction was $3-$8 higher. We did not get reports from three auctions and adverse weather limited receipts at others so the trend is based on a fairly light market test. Feeder cattle futures were lower in spite of lower corn futures. The fed cattle cash trade was $2 lower per cwt to $148 on only 120 head in Texas and about 1,000 head in Kansas. Reports suggested that these were lesser-quality cattle. However, these low volume early week sales often set the tone for the bulk of the trade later in the week. That would be disappointing for the cattle sector, given the continued rise in beef wholesale prices and higher pork prices. Estimated daily cattle slaughter continues to run above last week’s levels, but lower than a year ago. Wholesale boxed beef prices were higher. Fed cattle futures were lower in spite of the ongoing bullish fundamentals. These downward adjustments from record highs are to be expected from time to time, but even with the decline, live cattle futures are still 13% higher than a year ago (and cash prices are up 16%).

Cotton cash prices and futures were lower yesterday, with little fresh news to sustain a rally. Wire service reports that the International Cotton Advisory Committee’s slight upward adjustment in projected ending stocks seemed to weigh on the market yesterday.

Corn and grain sorghum prices were lower, though shift in the cash price range reported by USDA Market News again had an undue influence on the average cash price for corn. (The elevators on the low end of the range were missing in Monday’s average, but evidently they were included yesterday.) Reports noted that traders are still trying to figure out what impact the Ukraine crisis will have on grain markets through the summer. The country has become a major exporter over the past few years, with prices (and quality) generally lower than U.S. corn. Speculative profit taking on the underlying corn futures contract also factored into the decline in cash prices.

Wheat cash prices were higher and futures prices were mixed, from 1 cent lower per bushel to 1.75 cents higher. Wheat traders are also keeping a close eye on Ukraine, a major wheat export competitor.

Stock markets were near unchanged yesterday, with the Dow Industrial Average and Total Stock Market indexes modestly lower, the S&P 500 unchanged and Nasdaq modestly higher. The ADP private sector jobs report, viewed as a preview of the Labor Department report due tomorrow, showed a much smaller than expected increase in employment during February. January numbers were also revised much lower. The Institute for Supply Management’s service sector index fell more than expected.

This week’s U.S. Drought Monitor (click here for the Texas map or here for the U.S. map and summary) showed a slight improvement in conditions in Texas, with the area of the state rated as abnormally dry or in drought down 2 percentage points to 91%. The areas in moderate and exceptional drought increased, while other categories declined. up the most. Drought-free areas remain in East, South and West Texas. Nationally, 53% of the contiguous states were reported in some degree of abnormal dryness or drought, down 1 point 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. Commentary is the author’s alone and does not in any way convey official TDA policies.