Jun 20 2014

Texas Daily Ag Market Summary 6/20/14 Posted 9 years 317 days ago by

• Feeder cattle mostly steady to $7 higher; futures near limit higher.
• Fed cattle cash trade $3 higher; futures higher; beef prices higher.
• Cotton lower.
• Grains and soybeans mostly higher, except rice and soybean meal lower.
• Crude oil higher; natural gas lower.
• Stock markets mostly modestly higher.

 

The feeder cattle prices quoted by Texas auctions were mostly steady to $7 higher per cwt, with one location $8-$12 higher on steers and $10-$18 higher on feeder heifers. Feeder cattle futures rebounded, with every contract month up the $3 daily trading limit or very near it. The fed cattle cash trade was about $3 higher at nearly $150 per cwt. Reports noted that packers are still trying to purchase cattle for future delivery at prices discounted to current cash, but are finding it increasingly difficult to make the deal. Some feedlots are delivering cattle this week that they priced back in May at $143-$145. Boxed beef values were higher again yesterday and have gained about $9 so far this week, which will help packers offset some of the higher prices they are having to pay for cattle. Estimated cattle slaughter through Thursday totaled 461,000 head, the same as last week, but down 32K from a year ago. Fed cattle futures were higher in response to the higher cash market and a strong export report. In addition, traders expect a bullish USDA Cattle on Feed report this afternoon, with feed inventories, placements and marketings all lower than this time last year. Beef export sales for the week ending June 12 totaled 16,100 metric tons (MT), more than double the previous week and 33% higher than the prior four-week average. Hong Kong, Japan and Mexico were the leading buyers. Export shipments totaling 14,400 MT were near unchanged from the previous week and up 1% from the average. Japan, Hong Kong and South Korea were the top destinations.

Cotton cash prices and futures were lower again yesterday, with the nearby July futures contract down more than 2 cents per pound. Large world supplies, an expected slowdown in Chinese imports and prospects for a decent U.S. crop this year all continued to pressure the market. Export data were mixed. Cotton old-crop export sales totaled 153,100 bales, nearly four times higher than the previous week and up 4% from the prior four-week average. Indonesia, Vietnam and China were the primary buyers. New crop sales of 103,300 bales were up 38% from last week, but down 21% from the average. Exports totaled 119,800 bales were down 35% from a week earlier, 37% below the average and smaller than the weekly total needed to meet projections for the marketing year. China, Turkey and Mexico were the leading destinations.

Wheat prices were higher yesterday due to reports of harvest delays, related quality concerns and bullish export data. However, gains were limited by still-bearish market fundamentals (large world supplies and lackluster demand). Wheat export sales for the week of 372,600 MT were down 35% from the previous week with Brazil, Mexico and Indonesia the primary buyers, Shipments of 523,800 MT were up 9% from a week earlier. Brazil, the Philippines and Mexico were the leading destinations.

Corn and grain sorghum prices were higher due to concerns about storm damage in the Corn Belt and speculative buying of the underlying corn futures contract. There has been some flooding, hail and wind damage, but those kinds of events are usually very localized and end up having little impact on total production. Export data were termed “disappointing.” Corn old-crop export sales totaled 109,000 MT, down 73% from the previous week and 79% below the prior four-week average. New-crop sales of 78,900 MT were down 25% from a week earlier, but 13% higher than the average. Exports totaling 1,123,000 MT were up 5% from the previous week, but down 1% from the average, with Japan, Mexico and Taiwan the leading destinations.

Stock markets closed mostly modestly higher, with only the NASDAQ Composite posting a decline. Economic data were supportive and there was some carryover from remarks on Wednesday by Federal Reserve Chairwoman Janet Yellen. The Labor Department reported that initial unemployment claims fell more than expected last week. The Philadelphia Federal Reserve manufacturing index came in higher than expected. Blackberry reported a smaller than expected quarterly loss.

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.