Texas Daily Ag Market Summary 5/9/14

Posted 10 years 203 days ago by

Feeder cattle mostly steady; futures mostly lower.
Fed cattle cash trade inactive; futures higher; beef prices lower.
Cotton higher.
Grains and soybeans higher, except wheat lower.
Crude oil and natural gas lower.
Stock markets mostly lower.

USDA will release its monthly Crop Production and World Agricultural Supply & Demand Estimates (WASDE) later this morning. The Crop Production report will contain the first wheat production forecast of the year that is based on farmer surveys and in-field measurements. The WASDE will contain the first projections for the 2014/15 crop year. With the exception of wheat, crop projections will be based on acres from the March planting intentions report and trend-line yields adjusted for conditions this year. The Monday market summary will contain highlights from both reports.

Texas auctions reported feeder cattle prices mostly steady with one location $5 higher on feeder heifers. Feeder cattle futures were mostly lower, with only the May contract higher. The fed cattle cash trade remained mostly inactive yesterday, with unofficial reports that a few thousand head traded late in the day in Kansas at $148 per cwt, up $2 from last week’s average. Reports had the parties in Texas still about $4 per cwt apart on price. Packers were doing their best to pull prices lower in light of recent declines in beef prices and shrinking processing margins. However, feedlots are also being squeezed by high feeder cattle and rising corn prices and have resisted lower bids so far. Wholesale boxed beef values were lower yesterday. Estimated cattle slaughter through Thursday was up 5,000 head from last week, but 11,000 lower than a year ago. Fed cattle futures were higher.

Beef export sales for the week totaled 12,500 metric tons (MT), up 10% from the previous week, but down 28% from the prior four-week average. Japan, Canada and Mexico were the leading buyers. Export shipments of 13,500 MT were up 13% from the previous week and 10% from the average. The top destinations were Japan, South Korea and Hong Kong.

Cotton cash prices and old-crop futures were higher yesterday after weekly export data came in better than expected. Cotton export sales last week for the 2013/14 crop year totaled 63,800 bales, more than double the previous week and up 11 percent from the prior four-week average. Vietnam, Turkey and Indonesia were the primary buyers. Another 150,600 bales of new-crop 2014/15 cotton were sold. Export shipments of 208,300 bales were down 5% from the previous week and 18% below the average. The leading destinations were China, Turkey and South Korea. The deepening drought on the Texas High Plains and water shortages in California contributed to the increase. In addition, traders think the USDA supply/demand report to be released today will show lower production and projected ending stocks than the baseline projections issued in February. New-crop futures were lower on profit-taking ahead of today’s government reports.

Wheat prices slipped lower mostly due to speculative profit-taking and fund selling on the underlying futures contract. Market fundamentals remain mostly unchanged. There is a little rain forecast on the Plains, but it is expected to miss major wheat areas and the situation in Ukraine remains tense. A UN committee said it expects Ukraine’s total grain production to fall about 12% this year, mostly due to the political instability and higher input costs. Export data were mixed, with higher sales, but lower shipments. Wheat export sales for the 2013/14 crop year totaled 320,500 MT, up 49% from the previous week and 26% from the prior four-week average. Brazil, Indonesia and Thailand were the top buyers. Sales for the 2014/15 crop year totaled 125,000 MT. Export shipments of 526,600 MT were down 22% from a week earlier and 8% lower than a year ago. The primary destinations were Nigeria, Mexico and Japan.

Corn prices were higher and grain sorghum was mostly higher in spite of disappoint export figures as traders staked out positions ahead of today’s USDA reports. There is an unusually wide range in trade expectations for projected 2014/15 ending stocks – more than 1.3 billion bushels – which could result in more volatile than usual price movements after the report is released. Corn export sales for the 2012/14 crop year were 161,300 MT, down 83% from the previous week and 77% lower than the prior four-week average. Japan, Columbia and Taiwan were the top buyers. Cancellations of 210,000 MT to China and 116,800 to unknown destinations were reported. Sales for the 2014/15 crop year totaled 121,000 MT. Export shipments of 1,415,100 MT were up 16% from the previous week and up 11% from the average. The primary destinations were Japan, Mexico and South Korea.

Stock markets were mostly lower, with only the D-J Industrial Average posting a modest increase. In general, stocks in larger, safer companies which are covered by the Dow posted gains, while stocks in smaller, riskier companies declined. The Labor Department reported that the first-time unemployment claims last week fell more than pre-report expectations. The European Central Bank left its benchmark interest rates unchanged.

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.