Texas Daily Ag Markets 5/19/14

Posted 10 years 193 days ago by

Feeder cattle steady to $3 higher; futures higher.
Fed cattle cash trade inactive; futures higher; beef prices higher.
Cotton lower.
Grains mixed; soybeans lower.
Crude oil higher; natural gas lower.
Stock markets modestly higher.

Feeder cattle prices reported by Texas auctions and last week’s Texas direct feeder cattle sales were steady to $3 higher as market fundamentals remain very supportive. Feeder cattle futures were higher. The fed cattle cash trade was quiet on Friday after dropping nearly $1.50 per cwt Thursday. Confirmed trade volumes have been very light as many feedlots passed on those lower bids. Wholesale boxed beef values were higher Friday. Estimated cattle slaughter for the week totaled 591,000 head, down 1.5% from last week and 10% lower than the same week last year. Cumulative cattle slaughter year-to-date is running 6.2% behind a year ago. Fed cattle futures were higher Friday.

USDA released its monthly Cattle on Feed report yesterday showing 10.6 million head of cattle in feedlots with capacities of 1,000 or more head, down 1% from a year ago and equal to pre-report expectations. Placements in feedlots were down 5% and somewhat lower than expected. Marketings for slaughter were down 2% and pretty much in line with expectations. For Texas, feedlot inventories declined 4% from a year ago.

Cotton cash prices and futures again drifted lower as supplies continue to outstrip demand. Last week’s supply/demand report showing larger U.S. and foreign ending stocks still pressured the market,. However, price declines have been limited by several factors, including the very dry conditions on the Texas Plains. May is normally one of our wettest months statewide, but major cotton-growing areas around Lubbock have largely missed out on what rain has fallen. In addition, domestic supplies remain tight and much of China’s massive reserves – 60% of world cotton stocks – include quite a bit of low-quality 2013 cotton that their mills are reportedly not very interested in buying. Those factors have helped limited price declines.

Wheat prices were also lower Friday mostly due to weak international demand for U.S. wheat. Markets rose on expectations that the turmoil in Ukraine would boost sales of grain from other suppliers , but since we have not seen a big surge in sales, the market is now backing away from some of those gains. The dry conditions on the U.S. Plains still threaten the U.S. winter wheat crop.

Corn and grain sorghum cash prices were unchanged to modestly lower. Forecasts for good planting weather in much of the Corn Belt contributed to the decline. Otherwise, there was not much news to move the market much in either direction.

Stock markets were higher on Friday after the Commerce Department reported that new home starts jumped 13% higher during April and building permits rose 8%, both well above pre-report expectations. In addition, JC Penney posted a smaller than expected loss on higher than expected revenues.

The Office of the U.S. Trade Representative said last week on the second anniversary of the signing of the U.S.-Columbia Free Trade Agreement that the FTA “continues to make good on its promise of supporting the growth of American jobs; increasing U.S. exports for manufacturers, farmers and ranchers; and enhancing U.S. competitiveness.” Click here for the press release/fact sheet.

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.