TDA Daily Agriculture Market Summary 3/20/14

Posted 10 years 253 days ago by

Feeder cattle $8 lower to $4 higher; futures higher.
Fed cattle cash trade inactive; futures mostly higher; beef prices lower.
Cotton lower.
Grains and soybeans higher.
Crude oil and natural gas higher.
Stock markets lower.

Texas auctions reported feeder cattle prices ranged from $8 lower to $4 higher per cwt compared to a week ago. Market fundamentals remain very strong and even the auctions reporting lower prices were also steady on a portion of their offerings. Feeder cattle futures followed fed cattle higher in spite of higher corn futures. The fed cattle cash trade remained inactive across all major U.S. cattle feeding regions yesterday with feedlots asking $150-$151 versus packer bids of $147-$148. Wholesale boxed beef values declined yesterday. Estimated cattle slaughter for the week continues to run higher than last week, but lower than a year ago. Fed cattle futures were mostly higher.

Cotton prices were lower amid concerns that demand will not hold up at current price levels. Lower stock market indexes were also a factor in the decline. A survey by Doane Advisory Services indicated that cotton acres might increase slightly more than USDA at its Outlook Forum in February and higher than earlier survey results from the National Cotton Council.

Wheat prices were higher again yesterday, mostly due to speculative and fund buying of the underlying futures contract. Traders are becoming increasingly concerned about dry conditions on the U.S. Southern Plains and declining wheat crop ratings. The situation in Ukraine is still a factor, too, as Russia now controls the Crimean port of Sevastopol. However, Ukrainian officials have said the lost shipping capacity can be make up easily by other ports.

Corn and grain sorghum followed wheat and soybeans higher. After two weeks of disappointing export sales, traders are looking for stronger numbers this week to provide some fundamental support for this week’s price gains. Weak export data could put quite a bit of pressure on corn and grain sorghum prices.

A regular Doane survey showed higher prices for all eight types of fertilizer included in its report.

Stock markets closed lower yesterday after Federal Reserve Chairwoman Yellen said in a press conference that the central bank could start raising interest rates within six months of ending its bond purchases. The Fed also said it would reduce its purchases by $10 billion per month to $55 billion starting in April.

This week’s U.S. Drought Monitor (click here for the Texas map or here for the U.S. map and summary) showed overall conditions in Texas near unchanged, with the area of the state rated as abnormally dry or in drought holding steady at 85 percent. Parts of West, South and Southeast Texas remain drought-free. Looking at the ratings by category, areas rated abnormally dry and in severe drought declined, while areas in moderate, while areas in moderate and severe drought expanded. Areas rated in exceptional drought were near unchanged. Nationally, 51% of the contiguous states were reported in some degree of abnormal dryness or drought, down slightly 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.