Texas Daily Ag Market Summary 5/12/14

Posted 10 years 200 days ago by

Feeder cattle mostly steady to $5 higher; futures higher.
Fed cattle cash trade inactive; futures higher; beef prices lower.
Cotton cash prices lower; old-crop futures lower, new-crop higher.
Grains lower; soybeans higher.
Crude oil and natural gas lower.
Stock markets higher.

Feeder cattle prices reported by Texas auctions were mostly steady at several locations and steady to $5 higher per cwt at a few others. The Texas direct feeder cattle trade was $1-$7 higher, with the steers weighing 800 lbs. or more posting the largest increases. The report noted considerable movement off the remaining wheat pastures due to the dry conditions and higher prices. Feeder cattle futures were higher. Fed cattle cash prices were near steady at $146 per cwt in light trade. Wholesale boxed beef values continued to slide lower. Estimated cattle slaughter for the week totaled 597,000 head, down from both last week and a year ago. Year-to-date slaughter is running 6% behind this time last year. Fed cattle futures were higher.

Crop price movements on Friday were almost completely driven by the USDA Crop Production and World Agricultural Supply & Demand Estimates released late Friday morning.

Cotton cash prices and futures were lower after USDA supply and demand projections came in “more negative than expected”. For the current 2013/14 marketing year, final U.S. cotton production totaled 12.9 million bales, down from 13.2 million in the last forecast, but unchanged from April projections. However, USDA lowered projected exports to reflect a recent decline in sales and that pushed projected carryover higher. Projected world carryover was also raised by 1 million bales. For the 2014/15 crop year, the initial U.S. cotton production forecast came in lower than expected, but still 12% higher than in 2013.This, combined with a 7% drop in exports due to weaker world demand, pushed projected ending stocks 1.1 million bales (38%) higher than in 2013/14. World carryover also came in higher than expected.

Wheat prices were lower. The first 2014 production forecast based on farmer surveys and field measurements came in equal to pre-report expectations at 1.4 million bushels, down 9% from a year ago. U.S. projected carryover for 2013/14 was unchanged from April and slightly lower than expected, while 2014/14 stocks were down a little from this year and equal to pre-report expectations. However, projected world ending stocks came in a little higher than expected for both the 2013/14 and 2014/15 crop years. Over the past few weeks, the unrest in Ukraine and very dry conditions on the U.S. Plains have pushed wheat prices higher and those factors have not changed. Given the supportive U.S. supply/demand numbers and potential for further deterioration in crop conditions, the drop in prices following the USDA reports may be rather short-lived.

Corn and grain sorghum prices were also lower as ongoing concerns about planting progress and bullish corn supply/demand numbers for 2013/14 were more than offset by higher than expected projections for 2014/15. USDA projected U.S. ending corn stocks for the 2013/14 marketing year came in lower than a month ago and well below pre-report expectations. However, much higher than expected global carryout for both 2013/14 and 2014/15 pulled markets lower.

Stock markets were higher on Friday, with the Dow hitting a new all-time high 16,583 points, about 3 higher than the previous record set on Apr. 30. There was very little fresh economic news for the day. The Commerce Department reported that wholesale inventories rose by 1.1% during March, easily beating pre-report expectations for a 0.5% increase.

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.