Texas Daily Ag Market Summary 5/1/14

Posted 10 years 211 days ago by

Feeder cattle $3 lower to $5 higher; futures higher.
Fed cattle cash trade inactive; futures higher; Choice beef prices lower, Select higher.
Cotton cash prices higher; futures narrowly mixed.
Grains and soybeans mostly higher
Crude oil and natural gas lower.
Stock markets higher; Dow sets record high.

Texas auctions reported feeder cattle prices from $3 lower per cwt to $5 higher. Feeder cattle futures were higher in response to lower corn futures. The fed cattle cash trade was quiet across all major U.S. cattle feeding regions, with feedlots still asking $147-$148, up from last week’s $145 average. No word yet on packer bids. Wholesale boxed beef values were lower for Choice-grade offerings, but higher for Select. Estimated cattle slaughter for the week is running 20,000 head higher than a week ago, but 15,000 head below last year. Fed cattle futures were higher, with the April contract expiring at the end of the session.

The president of the National Pork Producers Council said in U.S. House testimony yesterday that the PED virus has killed 2 million baby pigs in the U.S., while private economists have pegged losses at more than 7 million.

Cotton cash prices were modestly higher, while futures were narrowly mixed. There is still a lot of cotton in storage worldwide, much of it in China, but U.S. supplies continue to tighten, with little wiggle room to cover needs until the new crop is harvested. As a result, traders are growing increasingly concerned about planting delays in the Southeast and the very dry conditions on the Texas High Plains.

Wheat prices were higher amid ongoing concerns about the dry conditions on the U.S. Southern Plains, including Texas. The annual Kansas wheat tour noted “increasing signs of drought in western Kansas.” Tour participants will disclose their wheat yield predictions at the end of the week and results are expected to be much lower than in 2013.

Corn futures and grain sorghum cash prices were lower, but corn cash prices were higher, as reported by USDA Market News. Elevators apparently made some basis changes to attract more corn to Panhandle cattle feeding regions as old crop supplies continue to dwindle. Ongoing corn planting delays also remain a concern, but Corn Belt forecasts are calling for warmer, drier weather over the next few days, which should help boost planting progress.

Stock markets closed higher yesterday, with the D-J Industrial Average setting a new record high, after the Federal Reserve said it would continue tapering back its bond purchases, as expected. Purchases will be reduced to $45 billion per month. The Commerce Department reported that GDP grew by only 0.1% during the first quarter of 2014, a much sharper slowdown than the 1.1% growth rate expected. Most observers attributed the low number to the harsh winter weather. Payroll processor ADP reported that the private sector added 220,000 jobs during April, higher than pre-report expectations. The Labor Department’s employment report for April will be released tomorrow.

This week’s U.S. Drought Monitor (click here for the Texas map or here for the U.S. map and summary) showed a continued decline in overall conditions in Texas, with 90 percent of the state now rated as abnormally dry or in some degree of drought, compared to 86 percent a week ago. The a rated in exceptional drought increased by more than five points and some areas slid from abnormally dry to moderate drought. Areas west of I-35 are in the worst shape, though much of the normally-arid Trans Pecos region remains drought-free. Meanwhile, the drought-free areas in East and South Texas grew smaller. Nationally, conditions improved slightly, with 49 percent the contiguous states reported in some degree of abnormal dryness or drought, down one percentage point 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.