TDA Daily Agriculture Market Summary 4/1/14

Posted 10 years 241 days ago by

Highlights from Monday’s USDA “Prospective Plantings” report included below.

Feeder cattle steady to $5 higher; futures lower.
Fed cattle cash trade inactive; futures lower; beef prices lower.
Cotton cash prices unchanged; futures lower.
Grains and soybeans higher.
Crude oil and natural gas lower.
Stock markets higher.

Texas auctions reported feeder cattle prices steady to $5 higher and on Monday, Oklahoma City was $1-$3 higher on feeders and steady on stockers. Prices remain at or near record highs at many locations, but have been more variable over the past few weeks, depending on the types and condition of the cattle on offer and how well they fit buyer orders for that day. Of note, slaughter cow prices continue to rise with OKC averaging nearly $104 last week and a top of $122.50. Feeder cattle futures were lower yesterday in response to higher corn futures. The fed cattle cash trade remained quiet yesterday after averaging $150 last week, unchanged from a week prior. Reports have Initial asking prices this week at $153. No word yet on packer bids. The TCFA daily volume and price summary shows 72,200 head in formula trades this week, down only 100 head from a week ago. Wholesale boxed beef values were lower yesterday. Estimated cattle slaughter was lower than last week, but higher than a year ago. Fed cattle futures were lower in response to the lower beef values and lower hog futures.

Cotton cash prices were unchanged, but futures were modestly lower for nearby contracts and higher for new-crop contracts. Traders generally took the USDA planting intentions report as price-neutral, with the expected cotton acreage well within pre-report expectations. The market remains very concerned about the drought conditions on the Texas High Plains, which could lead to higher abandonment again this year.

Corn and grain sorghum prices were higher in response to bullish USDA reports. U.S. intended corn planted acres came in on the low end of pre-report expectations, down 4% from last year, and the lowest acreage since 2010. However, it would still be fifth largest corn acreage on record. Corn in storage was up 30% from this time a year ago, but also on the low side of expectations. On top of that, the trade is concerned about potential planting delays in some areas.

Wheat prices followed corn and soybeans higher. Both 2014 intended acreage and stocks on hand March 1 came in a little higher than expected. Traders remain concerned about dry conditions on the U.S. Plains. Russia said it’s spring planting was ahead of last year’s pace and that wheat exports are 44% higher than they were at this time a year ago.

Stock markets closed higher yesterday said Monday that an unemployment rate of 5.2%-5.6%, well below the current 6.7%, would be “consistent with maximum sustainable employment,” suggesting Federal Reserve asset purchases with continue. A Midwest U.S. manufacturing index fell much more than expected in March. Inflation in the European “Eurozone” fell to its lowest reading since 2009, sparking fears that falling prices could stall growth.

Highlights from the USDA “Prospective Plantings” report issued Monday morning, intended planted acres and change from last year:

For the U.S.,

Corn planted 91.7 million acres, down 4% from last year and on the low end of pre-report expectations. If realized, it will be the lowest corn acreage since 2010, but still the fifth largest on record.
Soybean acres record high 81.5 million acres, up 6% from last year and slightly higher than expected.
All Wheat acres 55.8 million, down 1% from last year, but slightly higher than expected.
Cotton planted 11.1 million acres, up 7% from last year and near expectations.
Grain sorghum planted 6.7 million acres, down 17%.

For Texas, 2014 planting intentions and change from last year,

Corn -- 2.1 million acres, down 11%
Grain sorghum -- 2.3 million acres, down 23%
Cotton -- 6.4 million acres, up 10%
Winter wheat -- 5.9 million acres, down 5%
Hay -- 5.7 million acres, up 1%
Soybeans -- 145,000 acres, up 38%
Peanuts -- 140,000 acres, up 17%
Rice -- 135,000 acres, down 7%

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.