Texas Daily Ag Markets 5/16/14

Posted 10 years 196 days ago by

Feeder cattle steady to $4 higher; futures higher.
Fed cattle cash trade $1.36 lower; futures lower; beef prices slightly higher.
Cotton lower.
Grains and soybeans lower, except rice futures higher.
Crude oil lower; natural gas higher.
Stock markets lower.

Feeder cattle prices reported by Texas auctions were steady to $4 higher. There is not much new to talk about regarding feeder markets as supply/demand fundamentals remain unchanged -- and very supportive. Feeder cattle futures were higher in response to lower corn futures. Fed cattle cash prices were $1.36 per cwt lower on 1,400 head of confirmed sales. Small lots of fed cattle sold in most regions with prices showing even more of a decline in Kansas and Iowa. However, reports indicated that packers were unable to make further purchases at those prices. Wholesale boxed beef values were modestly higher and estimated cattle slaughter week-to-date continues to run below both last week and a year ago. Fed cattle futures followed cash prices lower.

There were rumors that Cargill might lay off workers and reduce hours at its beef plant at Dodge City. The drought and smaller cattle numbers continue to take their toll on the cattle sector.

Weekly beef export sales totaling 12,700 metric tons (MT) were up 2% from the previous week, but down 20% from the prior four-week average. Japan, Canada and Mexico were the top buyers. Export shipments of 13,900 MT were up 3% from the previous week and 11% above the average. Japan, South Korea and Hong Kong were the leading destinations.

Cotton cash prices and futures were lower again yesterday “amid weak U.S. export sales, broad losses in commodities and a sharp selloff in equities.” Cotton export sales totaled 34,000 for the current marketing year, down 47% from the previous week and down 55% from the prior four-week average, but still higher than the weekly average needed to meet projections for the marketing year. Turkey, China and Mexico were the primary buyers. Another 12,100 bales of new-crop cotton were also sold. Shipments of 210,900 bales were up 1% from the previous week, but down 9% from the average. Shipments were also higher than the weekly average needed to meet expectations for the marketing year. China, Turkey and Vietnam were the top destinations. Cotton is particularly sensitive to general economic conditions as it is easier for consumers to turn textile purchases on or off depending on available income. Thus yesterday’s decline in stock markets also pulled cotton lower. However, cotton price declines are still limited by the very dry conditions in Texas that threaten this year’s crop.

Wheat prices were sharply lower, with cash prices and the underlying futures contract down 27 cents to 28 cents per bushel. Weak export data, ample world supplies and reports that China expects its wheat production to increase by 1% this year caused the drop. Improved spring wheat planting conditions on the Northern Plains and forecasts for rain on parts of the Southern Plains were also factors. Wheat export sales totaling 54,900 MT for the current marketing year were down 83% from both a week earlier and the average. Brazil, Iraq and the Philippines were the top buyers. An additional 197,100 MT of new-crop wheat were also sold. Export shipments of 635,300 MT up 21% from the previous week and 12% above the average. The leading destinations were Brazil, the United Arab Emirates and the Philippines.

Corn and grain sorghum followed wheat lower as decent planting conditions in the Midwest improved prospects for this year’s crop. One wire service report said that market sentiment has turned from worries about wet fields and planting delays to “rain makes grain.” Weak export data contributed to the decline. Corn old-crop export sales for the week totaled 343,000 MT, more than two times higher than the previous week, but down 30% from the prior four-week average. Egypt, Japan and Portugal were the primary buyers. New-crop sales totaled 47,300 MT. Export shipments of 1,023,300 MT were down 28% from the previous week and 23% lower than the average. The leading destinations were Japan, Mexico and Egypt.

Stock markets were lower yesterday on mixed corporate news and economic data. Cisco reported better than expected first quarter results, but Wal-Mart “posted a sizable miss.” The Labor Department reported that new unemployment claims fell last week, compared to expectations for an increase. Another report from DOL showed consumer prices rose 0.3% during April, matching expectations. Core prices, excluding food and fuel, were up bu 0.2%, more than the 0.1% expected. A New York Federal Reserve manufacturing index came in much higher than expected. A similar reading from the Philadelphia Fed also exceeded expectations. The National Association of Home Builders sentiment index came in lower than expected.

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.