TDA Daily Agriculture Market Summary, 3/11/14

Posted 10 years 262 days ago by

Feeder cattle mostly steady to $2 higher, few $8 higher; futures higher.
Fed cattle cash trade inactive; futures mostly higher; beef prices higher.
Cotton higher.
Grains and soybeans lower.
Crude oil lower; natural gas higher.
Stock markets modestly lower.

Texas auctions reported feeder cattle prices mostly steady to $2 higher per cwt, with one location $$4-$8 higher. Lower numbers of available cattle, strong fed cattle and beef prices and ample grain supplies continue to support the market. Feeder cattle futures were lower in response to lower corn futures. The fed cattle cash trade yesterday was inactive across all major U.S. cattle feeding regions, with initial asking prices up $2 from last week to $150 per cwt. The TCFA daily volume and price summary shows 62,800 head in formula trades this week, up from 60,600 head last week. Estimated daily cattle slaughter came in at 105,000 head, well below both last week and last year. Wholesale boxed beef values were higher. Fed cattle futures were mostly higher.

Lean hog futures were sharply higher yesterday, up the daily trading limit of $3 per cwt to $116, and live hog prices were higher. The broiler chicken industry, the fourth largest contributor to Texas agricultural cash receipts, will almost without a doubt benefit from higher beef and pork prices. Broiler prices jumped more than 8 cents per pound last week, just as beef and pork prices rose. Retailers will likely feature chicken more often and cheaper chicken prices will draw consumers away from beef and pork. Chicken growers can also respond to higher demand more quickly than any other meat sector, which should benefit their market share.

Cotton cash prices and futures were higher yesterday after USDA supply and demand projections came in very near pre-report expectations. Projected 2013/14 cotton exports were increased by 200,000 bales to 10.7 million and ending stocks were reduced by the same amount to 2.8 million bales. U.S. production was held unchanged, but ginning data suggests that USDA will lower production numbers when it releases its final cotton estimates for the year. That would further tighten domestic supplies. World ending stocks increased slightly as a result of lower world consumption estimates. The world stocks are the highest on record, equivalent to nearly 11 months of usage, with China holding 60% of the total.

Corn and grain sorghum prices followed soybeans lower in spite of mostly bullish USDA supply/demand data. U.S. projected corn ending stocks totaled 1.46 billion bushels, down from last month’s estimates and on the low end of pre-report expectations. Even with the reduction, corn supplies remain large and well above a year ago. Projected world stocks increased, which also added to the negative mood.

Wheat followed other grains lower. The USDA supply/demand report was considered market-neutral, with U.S. projected ending stocks unchanged from a month ago and very near pre-report expectations. World supplies were also near-unchanged. Traders are also keeping an eye on the condition of the U.S. winter wheat crop. National ratings are not available yet, but USDA NASS numbers for Texas showed a modest improvement over a week ago.

Stock markets closed modestly lower yesterday after China reported an 18% drop in exports during February, compared to expectations for a 7.5% increase. Japan also revised lower its estimate of economic during the fourth quarter of 2013. There were no U.S. economic reports yesterday.

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.