Texas Daily Ag Market Summary 6/12/14

Posted 10 years 169 days ago by

Feeder cattle mostly $3-$8 higher; futures lower.
Fed cattle cash trade inactive; futures lower; Choice beef prices lower, Select higher.
Cotton lower.
Grains lower to sharply lower; soybeans lower.
Crude oil higher; natural gas lower.
Stock markets lower.

Feeder cattle prices reported by Texas auctions were mostly $3-$8 higher per cwt, with a few locations steady to $2 higher. Feeder cattle futures were lower as speculative profit-taking set in following recent price increases to record highs. Market fundamentals are still very supportive, so prices might go down a little, but an extended sell-off is unlikely. The fed cattle cash trade remained inactive through Wednesday across all major U.S. cattle feeding regions. Reports have feedlots still asking $147-$148 versus packer bids of $142-$143. Wholesale Choice beef prices slipped lower, while Select-grade offerings were higher. Estimated cattle slaughter so far this week totals 345,000 head, down 3,000 from last week and 21,000 below a year ago. Fed cattle futures were lower.

Cotton cash prices and futures were lower following the release of USDA’s World Agricultural Supply & Demand Estimates (WASDE). Projected U.S. old-crop ending stocks were reduced by 100,000 bales and 2014/15 production came in equal to expectations at 15 million bales as projected abandonment fell. However, projected domestic mill use and exports were held unchanged so projected 2014/15 ending stocks came in at the top end of pre-report expectations. If realized, the stocks- to- use ratio will climb to 32%, the highest in 6 years. “World forecasts for 2014-15 featured higher beginning and ending stocks, equivalent increases in production and mill use and a decline in trade.”

Wheat prices were lower to sharply lower after USDA raised its projected carryover for both the current marketing year and 2014/15. The U.S. winter wheat production forecast fell 2% from last month and is down 9% from last year as drought and winterkill take their toll. However, the drop in production was more than offset by decreases in domestic use and imports, resulting in higher projected carryover stocks. Global wheat supplies for 2014/15 were also increased, resulting in higher world ending stocks for 2014/15, with much of the increase in the United States.

The Texas winter wheat production forecast was reduced 14% to 47.5 million bushels, down 27% from a year ago. If realized, this would be the lowest Texas wheat production since the 33.6 million bushels in 2006.

Corn and grain sorghum prices were also lower after USDA left both the old-crop and new-crop corn and grain sorghum balance sheets unchanged. However, the end result of that was slightly higher than expected projected carryover stocks for corn. Higher projected world ending stocks also pressured the market as higher corn production and lower exports were only partially offset by higher domestic use.

Stock markets closed lower yesterday. With no major economic reports for the day, traders focused on a World Bank report that cut the global growth forecast for 2014 to 2.8%, down from its earlier forecast of 3.2%.

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.