Texas Daily Ag Market Summary 5/2/14

Posted 10 years 210 days ago by

Feeder cattle mixed, some locations steady, others $3-$4 higher; futures higher.
Fed cattle cash trade inactive; futures higher; beef prices lower.
Cotton cash prices unchanged; futures narrowly mixed.
Grains and soybeans mostly lower, except rice futures higher.
Crude oil and natural gas lower.
Stock markets mixed.

Texas auctions reported feeder cattle prices were mixed, with some locations steady compared to last week’s sale and some $3-$4 higher. Feeder cattle futures were higher in response to lower corn futures. The fed cattle cash trade remained inactive through Thursday afternoon in all major U.S. cattle feeding regions, though there were unconfirmed reports of a few head changing hands in Texas at $147, up $2 from last week’s average. Most reports pegged asking prices at $147-$148. Wholesale boxed beef values were lower for both Choice and Select offerings, with Choice cuts down nearly $3 per cwt. Estimated cattle slaughter through Thursday was still running well ahead of last week’s pace, but behind a year ago. Fed cattle futures were higher, with the front-month June contract trading at a significant discount to cash.

Beef export sales for the week ending Apr. 24 totaled 11,400 metric tons (MT), down 37% from both the previous week and the prior 4-week average. The leading buyers were Japan, Mexico and South Korea. Shipments of 11,900 MT were unchanged from the previous week, but down 3% from the average. Japan, Hong Kong and Mexico were the top destinations.

Cotton cash prices were unchanged, but futures were narrowly mixed. Tight current supplies, planting delays and the very dry conditions in Texas continue to support prices, but these factors were offset by mostly-bearish export data. Cotton export sales for the week totaled 31,400 bales, down 75% from the previous week, 48% below the prior 4-week average and smaller than the weekly average needed to meet USDA projections for the marketing year. China, Turkey and Taiwan were the leading buyers. An additional 48,900 bales were sold for the 2014/15 marketing year. Shipments of 218,200 bales were unchanged from a week earlier and higher than the average needed to meet USDA expectations, but down 17% from the prior 4-week average. The top destinations were Turkey, China and South Korea.

Wheat prices followed corn and soybeans lower yesterday in spite of serious concerns about the U.S. winter wheat crop. Dry weather and winterkill are expected to limit production this year. The Kansas wheat tour wraps up today and participants are expected to show “the lowest yield in a number of years.” Other sources said Oklahoma’s production could be down by 37% from a year ago. USDA’s May Crop Production report, to be released on May 9, will give us our first look of the season at potential production based on a farmer survey. Weak export sales added to the decline, but were offset somewhat by strong shipments. Wheat export sales of 214,900 MT were down 37% from the previous week and 25% from the prior 4-week average. The primary buyers were the Philippines, Japan and Brazil. An additional 219,600 MT were sold for the 2014/15 marketing year. Export shipments totaling 678,600 MT were up 31% from the previous week and up 27% from the average. Columbia, Japan and Nigeria were the leading destinations.

Corn and grain sorghum prices were lower on forecasts for better planting weather that should give Midwest farmers a chance to catch up on field work. Export data were neutral to bullish. Corn export sales for the week totaled 937,900 MT, up 52% from a week earlier and 35% from the prior 4-week average. Japan, Mexico and South Korea were the leading buyers. Another 13,800 MT were sold for the 2014/15 marketing year. Shipments of 1,216,000 MT were down 25% from the previous week and 8% below the average. The top destinations were Japan, Mexico and Egypt.

Stock markets were mixed yesterday, with some indexes modestly lower and some slightly higher. The Commerce Department reported that consumer spending rose by 0.9% during March, the biggest increase since August 2009 and higher than pre-report expectations. Personal income also rose more than expected. The Labor Department reported that new unemployment claims rose last week, compared to expectations for a decline. The Institute for Supply Management’s manufacturing index rose more than expected for April. The Labor Department’s monthly employment report will be released this morning.

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.