TDA Daily Agriculture Market Summary 4/7/14

Posted 10 years 235 days ago by

Feeder cattle mostly steady to $5 higher, few $15 higher; futures lower.
Fed cattle cash trade $2 lower; futures lower; beef prices lower.
Cotton higher.
Corn, grain sorghum, rice higher; wheat and soybeans lower.
Crude oil higher; natural gas lower.
Stock markets lower.

Texas auctions reported feeder cattle prices were steady to as much as $15 higher per cwt, with the most advance on yearling feeders. Strong supply/demand fundamentals continue to support the feeder market. Feeder cattle futures were lower, however, in response to higher corn futures. According to the TCFA daily volume and price summary, the fed cattle cash trade on Friday averaged $148 per cwt on about 1,800 head, down $2 from last week’s average. USDA confirmed a few hundred head at the same prices. TCFA also showed 3,500 head of cash purchases that were converted to formula. Lower beef prices this week and sharply lower hog futures were cited as the primary reasons for the decline. (Hog markets and pork prices tumbled after China threatened to restrict imports of live hogs from the U.S. due to the PED virus that causes extensive losses of baby pigs. Pork industry groups in Brazil are also asking their government to ban U.S. hogs.) Wholesale boxed beef prices were sharply lower. Cattle slaughter for the week was down from both the previous week and a year ago. Fed cattle futures dropped in response to the lower hog/pork markets and lower cash cattle prices.

Cotton cash prices and futures were higher after the U.S. ag attaché reported that India’s cotton production will likely fall by about 1 million bales this year, while consumption is expected to increase. As a result, Indian cotton exports will likely drop by 25%, opening the door for stronger U.S. sales. India is the world’s second largest cotton producer and consumer behind China and the second largest cotton exporter behind the United States.

Corn and grain sorghum prices were higher on Friday due to concerns about possible planting delays in some areas, strong exports and good domestic demand. However, ample current supplies are still keeping a lid on gains. Grain markets could get a little choppy over the next couple months as traders keep an eye on the weather and try to gauge the potential size of this year’s crop. USDA will continue to update its supply/demand estimates every month, but the next acreage report won’t be released until the end of June.

Wheat prices were lower on speculation that rain on the U.S. Plains could help the crops. However, totals so far have been very light and most of the winter wheat belt remains in severe drought condition, or worse. The negative mood was reinforced by a report from Russia’s ag ministry that spring wheat planting is progressing ahead of last year’s pace.

Stock markets closed lower on Friday, with tech stocks leading the way. Google, Yelp, Pandora and biotech companies were among the big losers on the tech side. The Labor Department reported that the economy added 192,000 jobs in March, well below the 200,000 expected. The unemployment rate also came in a little higher than expected. The labor participation rate rose slightly. One analyst wrote in a client newsletter that “ The economy continues to create jobs at a good, but not great, pace that we should be seeing this far into the recovery.” Economists blamed the weather for the weak indicators during January-February and are hoping for stronger readings for March.

USDA last week announced a $20 million program to control feral hogs. Click here for the press release. According the USDA Undersecretary Edward Avalos, “We’ve already begun this type of work through a pilot program in New Mexico. Through this pilot program, we have successfully removed feral swine from 5.3 million acres of land. By applying the techniques such as trap monitors and surveillance cameras we have developed through this pilot project, we aim to eliminate feral swine from two States every three to five years and stabilize feral swine damage within 10 years.” The plan allows $9.5 million for state projects. The rest is for research and disease monitoring.

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.