2014

Posted 10 years 297 days ago by

Feeder cattle mostly steady to $8 higher, few lower: futures lower.
Fed cattle cash trade $2-$3 lower for the week; futures lower; beef prices higher.
Cotton higher.
Grains and soybeans higher.
Crude oil and natural gas higher.
Stock markets mostly higher.

Texas auctions reported feeder cattle prices mostly steady to $8 higher compared to last week’s sale, though one location had prices $1-$2 lower on feeder heifers. Market fundamentals remain very bullish, but this week’s lower fed cattle prices might introduce a little more weakness. Even with these occasional dips, feeder prices remain well above where they were at this time last year. Feeder cattle futures were lower in response to higher corn futures. Fed cattle cash prices so far this week have been $2-$3 lower per cwt across all major U.S. cattle feeding regions, with Texas prices averaging $147-$148 on only 1,400 of confirmed sales. Wholesale boxed beef values were higher yesterday, but still not kept up with the surge in fed cattle prices. Estimated daily cattle slaughter totaled only 108,000 head yesterday and cumulative slaughter for the week is now running behind both last week and a year ago. Fed cattle futures were lower in response to the lower cash market and weaker exports. Beef export sales for the week at 11,100 metric tons (MT) were down five percent from a week earlier and four percent from the prior four-week average. Japan and Hong Kong were the leading buyers. Export shipments were down three percent from both the previous week and the average.

Cotton cash prices and futures were higher yesterday as “strong U.S. weekly export sales and shipments reinforced expectations for lower ending stocks.” Both export sales and shipments as a percent of the USDA projected marketing year total are running ahead of last year’s pace. Higher U.S. stock markets and a weaker dollar also contributed to the increase. Cotton weekly export sales totaled 159,500 bales, much higher than expected, nearly six times higher than the previous week (which was a marketing year low) and up 60 percent from the prior four-week average. China, Turkey and Vietnam were the leading buyers. Export shipments hit a high for the marketing year at 363,800 bales, up 31 percent from a week earlier and 12 percent from the average. The top destinations were also China, Turkey and Vietnam.

Corn and grain sorghum prices were higher yesterday in response to supportive, higher than expected export data and higher soybean prices. Traders are also keeping an eye on developments in Ukraine. As noted previously, the country is a major export competitor and any weakness there could boost demand for U.S. grains. (The High Plains average grain sorghum price was artificially lower yesterday as the elevators on the top end of the price range either did not report or adjusted their prices lower. Whatever the reason, the price range on grain sorghum narrowed to the low end of the previous range, which pulled down the average.) Corn weekly export sales came in much higher than expected at 1.5 million MT, up 81 percent from the previous week and 35 percent from the prior four-week average. The leading buyers were Mexico, Japan and Columbia. Export shipments totaled 1.1 million MT, up 33 percent from a week earlier and 38 percent above the average. South Korea, Mexico and Japan were the top destinations.

Wheat prices followed corn and soybeans higher, but concerns about more-than-ample world supplies limited the gains. The Ukraine crisis and potential winterkill in the U.S. also remained supportive. Wheat export sales for the week of 556,100 MT were up 52 percent from the previous week, 10 percent higher than the prior four-week average and very near pre-report expectations. The leading buyers were Mexico, Brazil and China. Export shipments at 633,000 MT were up 16 percent from the week earlier and up 59 percent from the average. The top destinations were Brazil, the Philippines and Egypt.

Stock markets were mostly higher, with the Nasdaq the only one of the major indexes to post a modest decline. The Labor Department reported that new unemployment claims fell more than expected last week. The employment report for February will be released later this morning. On the down side, the Commerce Department reported that factory orders fell more than expected during January.

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.