Texas Daily Ag Market Summary 6/17/14

Posted 10 years 164 days ago by

Feeder cattle steady to $10 higher; futures higher.
Fed cattle cash trade inactive; futures lower; beef prices higher.
Cotton higher; futures mostly lower.
Grains and soybeans lower, except rice futures higher.
Crude oil and natural gas lower.
Stock markets modestly higher.

Feeder cattle prices reported by Texas auctions were steady to $2 higher at a few locations and $4-$10 higher at others. The Oklahoma City National Stockyards were sharply higher on all feeder classes. Feeder steers and steer calves were mostly $6 to $10 higher, with instances of $10 to $15 higher on steers weighing over 800 lbs. Feeder heifers mostly $4 to $6 higher and heifer calves were $10 to $14 higher, with instances up to $17 higher on 550-600 lb. heifers. Feeder cattle futures hit a new record high of $208.70. The fed cattle cash trade was inactive yesterday. Reports pegged initial feedlot asking prices at $150 per cwt with show lists somewhat larger than a week ago. Wholesale beef values were higher and estimated cattle slaughter on Monday totaled 116,000 head, up 3,000 from last week, but 7,000 below a year ago. Fed cattle futures were higher. Tight supplies and strong demand continue to support the entire cattle complex, though the record-high feeder cattle market is squeezing feedlot margins and fed cattle prices are squeezing packers. Of course, it will all ultimately come down to how much consumers are willing to pay for beef. The high calf prices and improved pasture conditions following recent rains also continue to encourage herd rebuilding. That will likely pull more heifers and cows out of the beef mix, further tightening supplies. And prices for replacement cows continue to climb. Auction prices for bred cows of $1500-$1700 per head are not uncommon, with some well over $2500. Pairs can easily bring $1700-$1900, with some higher-quality offerings well over $3000.

Cotton cash prices and nearby July futures were higher yesterday, but new-crop futures were lower. Limited supplies of uncommitted old-crop cotton and decent buying interest at recently-lower prices continue to support the current market. However, new-crop prices remain under pressure. Recent rainfall has boosted prospects for this year’s crop, though many analysts think planted acreage will come in a little lower when USDA issues its Acreage report on June 30. In addition, a slowdown in world trade and higher global production is expected to add to excess supplies, pushing the projected 2014/15 stocks-to-use ratio to its highest level in six years. In Texas, cotton planting advanced to 93% complete, slightly behind both last year and the 5-year average. The crop was rated in mostly fair to good condition, with an overall condition index of 66 points, up from 55 points at this time last year. Nationally, cotton planting was 94% complete, also slightly behind last year and the average. Most of the acreage was rated in fair to good condition.

Wheat prices were lower again yesterday as ample world supplies and lackluster demand continue to pressure the market. There were reports of harvest delays on parts of the U.S. Southern Plains and concerns about how the drought, and now rain, will impact quality. Texas wheat harvest was reported 40% complete with 100% of the acreage headed. Harvest is running behind both last year and the 5-year average as the aforementioned rains slow progress. The crop was rated in mostly poor to very poor condition, with an overall condition index of 36 points, compared to 26 points at this time last year. Nationally, 16% of the winter wheat crop has been harvested compared to 20% on average by this date, with about half the acreage rated fair to good and the other half rated poor to very poor.

Corn and grain sorghum prices were also lower yesterday as crop condition ratings improved over last week’s, reinforcing prospects for a large 2014/15 crop. Of course, there is a lot of growing season left with plenty of opportunity for the crop to get even better, or turn worse, and that will keep prices somewhat volatile over the next several months. In Texas, 45% of the corn acreage is silked (tasseled), compared to 57% at this time last year and 54% on average. The crop was rated in mostly good to fair condition, with a condition index of 79 points compared to 74 at this time last year. Nationally, 97% of the acreage has emerged, slightly ahead of the 96% average, with the crop rated in mostly good condition. Texas grain sorghum is 94% planted, ahead of both last year and the average, with the crop rated in mostly good to fair condition.

Stock markets closed modestly higher yesterday, though traders remained very concerned about the situation in Iraq. Economic reports were rather limited. The New York Federal Reserve Bank regional manufacturing index came in higher than last month, compared to expectations for a decline. The National Association of Home Builders sentiment index also came in higher than expected. The International Monetary Fund lowered its forecast for 2014 U.S. GDP to 2% from an earlier reading of 2.8%.

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.