Texas Daily Ag Markets 5/15/14

Posted 10 years 197 days ago by

Feeder cattle mostly steady to $4 higher; futures higher.
Fed cattle cash trade inactive; futures higher; beef prices lower.
Cotton lower.
Grains lower; soybeans higher.
Crude oil and natural gas higher.
Stock markets lower.

Texas auctions reported feeder cattle prices mostly steady to $4 higher, with a few as much as $8 higher. Auction receipts continue to run well below year-ago levels at almost all locations and those tight supplies continue to support the market. Feeder cattle futures were higher in response to lower corn futures. The fed cattle cash trade remained inactive yesterday with feedlots holding firm at $148 per cwt, up $2 from last week’s average. Wholesale boxed beef values were lower. Estimated cattle slaughter so far this week is running 2% below last week and 5% below a year ago. Fed cattle futures were higher.

Cotton cash prices and futures were lower ahead of this morning’s USDA exports report. What news there was for the day was mostly supportive – talk that China would permit mills to import cotton in proportion to their domestic purchases from state reserves and worsening drought conditions on the Texas High Plains. However, last week’s bearish USDA supply/demand report continued to weigh on the market and higher prices early in the day turned lower before trading ended.

Wheat prices were lower again yesterday as large world supplies continue to pressure the market. Forecasts for rain on parts of the U.S. Southern Plains added to the decline. It looks like the market thinks it has largely priced-in the impact of the very dry conditions on the Plains and resulting lower U.S. production. Most of the recent price adjustments have been to the lower side in response to the global situation and any possible relief for conditions here at home.

Corn and grain sorghum prices were also lower on reports that farmers in the Midwest continue to make good planting progress.

As for those dry conditions on the U.S. Plains, the National Climate Data Center at NOAA said in an April weather review that ““Below-average four-month precipitation totals were widespread across the Southwest and the Central and Southern Plains. Arizona, Kansas, New Mexico, Oklahoma, and Texas each had January-April precipitation totals that ranked among their 10 driest on record. Oklahoma had its second driest January-April on record, with less than half of average precipitation; 1936 was the driest. The dry conditions across Oklahoma decimated much of the winter wheat crop in the state, with estimates of the lowest harvested yield since 1957. In west Texas, precipitation deficits that date back to 2010 have been unprecedented in the observational record, with nearly every major reservoir in the region at less than 40 percent of capacity.”

This week’s U.S. Drought Monitor (click here for the Texas map or here for the U.S. map and summary) showed a very modest improvement in conditions in Texas, with 91 percent of the state now rated as abnormally dry or in some degree of drought, down from 95 percent a week ago. The area in the worst category, exceptional drought, declined by about a half a percentage point and the area in extreme drought fell by nearly six points. Areas west of I-35 remain in the worst shape. Nationally, conditions also improved somewhat with 49 percent the contiguous states reported in some degree of abnormal dryness or drought, down two percentage points 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.