Texas Daily Ag Market Summary 6/13/14

Posted 10 years 168 days ago by

Feeder cattle mostly $2-$5 higher; futures higher.
Fed cattle cash trade $2 higher; futures higher; Choice beef prices lower, Select higher.
Cotton cash prices unchanged; futures higher.
Grains higher; soybeans lower.
Crude oil and natural gas higher.
Stock markets lower.

Feeder cattle prices reported by Texas auctions were mostly $2-$5 higher, with a few locations steady and one $10-$12 higher. Feeder cattle futures were higher. The fed cattle cash trade was $2 higher than last week at $147 per cwt. As one report noted, “Packers need cattle and feeders made them pay up.” Wholesale beef prices were again lower for Choice cuts, but higher for Select-grade offerings. Estimated cattle slaughter through Thursday continued to run lower than both last week and a year ago. Fed cattle futures were higher. Beef exports for the week June 5 totaled 6,700 metric tons (MT), down 60% from the previous week and 51% lower than the prior four-week average. Hong Kong, Canada and Taiwan were the leading buyers. Export shipments of 14,400 MT were up 20% from the previous week and 3% from the average, with Japan, Hong Kong and Mexico the top destinations.

Cotton cash prices were unchanged, but futures were higher in spite of mostly-bearish export data. Wire service reports noted that the price drop after the USDA WASDE report on Wednesday “was tied exclusively to USDA’s failure to raise projected exports.” However, yesterday’s weekly export report was “disappointing and supportive of USDA’s decision not to raise its export forecast.” Export sales of old-crop cotton totaled 40,800 bales, down 69% from the previous week and 72% lower than the prior four-week average. China, Taiwan and Turkey were the primary buyers. New crop sales totaled 74,700 bales, down 58% from a week earlier and 35% from a year ago. Export shipments of 182,700 bales were well above the weekly total needed to meet USDA projections for the marketing year, up 9% from the previous week, but down 7% from the average. The top destinations were Turkey, China and Mexico.

Wheat prices were modestly higher yesterday mostly due to buying interest on the underlying futures contract. Market fundamentals remain generally weak as the advancing harvest adds to already-abundant supplies and yesterday’s export data did little to change the bearish picture. Net sales for the new marketing year that began June 1 totaled 570,100 MT, with Brazil, Mexico and Nigeria the primary buyers. A total of 1.6 million MT were carried over from the previous marketing year. Export shipments for the period ending May 31 were 150,400 MT, resulting in accumulated exports for the marketing year totaling 30.1 million MT, up 14% from a year earlier.

Corn and grain sorghum prices were higher, also mostly due to speculative buying of the underlying corn futures contract. Growing conditions continue to favor a large crop this year and weekly export data were mixed. Old crop corn sales totaling 409,700 MT were down 26% from the previous week and 17% below the four-week average, with Japan, Egypt and Mexico the leading buyers. New-crop corn sales of 105,500 MT were five times higher than a week earlier and up 92% from the average. Export shipments of 1,070,500 MT were down 8% from the previous week and 5% from the average. Japan, Mexico and Egypt were the primary destinations.

This week’s U.S. Drought Monitor (click here for the Texas map or here for the U.S. map and summary) showed a modest improvement in overall conditions in Texas, with 89% of the state rated in some degree of drought or abnormal dryness, down from 91% a week ago. The areas in the two worst categories, extreme and exceptional drought, dropped again this week to 23%, down from 27% last week. Nationally, the total area experiencing abnormal dryness or some degree of drought declined by 2 points to 46% of the contiguous states.

Stock markets were lower yesterday amid growing concerns about the situation in Iraq and a round of weak U.S. economic data. In Iraq, the nation’s army appears to be crumbling in the face of armed rebellion, raising concerns about the country’s ability to sustain itself and threatening its oil exports. There were added fears that the instability could spread to other countries, including Turkey and Iran. Domestically, the Commerce Department reported that retail sales during Mary rose less than expected. The Labor Department reported that import prices rose less than expected during May, but that export prices met expectations. Separately, the Labor Department said that new unemployment claims rose last week, compared to expectations for a decline.

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.