Texas Daily Ag Market Summary 6/25/14

Posted 10 years 156 days ago by

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

Feeder cattle prices reported by Texas auctions were mostly steady to higher with one location $6-$12 higher on light-weight calves, but steady to $5 higher on heavier weights. Feeder cattle and fed cattle futures were both sharply higher yesterday as traders anticipated ongoing impacts of the tight supplies and strong demand, coupled with expectations for higher boxed beef values. The fed cattle cash trade was quiet on Tuesday, with asking prices at $152, up $2+ from last week’s average. No word yet on packer bids. Estimated cattle harvest so far this week has totaled 230,000 head, equal to this time last week, but 6K below a year ago. Wholesale boxed beef values were higher.

Across the crop sector, traders are starting to take up positions based on what they think next Monday’s USDA Acreage and Grain Stocks reports will show:

Cotton cash prices and futures were lower, with the nearby July contract sharply lower. It was the first delivery notice day for the expiring July contract, which generally triggers activity from those not wanting to make or take physical cotton delivery. Comments noted that on the Texas Plains cotton is developing slowly. “Cooler temperatures following recent rains were conducive for development of seedling diseases and poor root and upper plant growth.” On the plus side, insect pressure has remained low in many areas.

Wheat prices were lower yesterday as large global supplies and weak demand continue to depress the market. There are ongoing concerns about harvest delays, poor yields and low quality – one report called it “dismal” – but those factors have already been priced into the market. It will take another supply shock or surge in demand to turn prices around. Wire services reported that Saudi Arabia bought 780,000 metric tons of wheat this week and Egypt bought 180,000 MT. No word yet on where the Saudi wheat originated, but the U.S. did not get any of the Egyptian business.

Corn and grain sorghum prices were also lower as conditions remain favorable for large crops this year and forecasts for warmer temperatures in the eastern Corn Belt could boost crop development. However, traders are also keeping an eye on excessive rains and flooding in the Corn Belt, especially in Iowa and Minnesota. There could be some production impacts if damage is widespread enough, but even reports of localized problems can have a psychological impact on traders sitting in a Chicago office tower.

Stock markets closed lower yesterday in spite of mostly-bullish economic data. The Commerce Department reported that sales of new single family homes rose by nearly 19% during May, the largest monthly increase since January 1992. Home sales hit their highest level since May 2008 and beat expectations by a wide margin. A leading metro-area home price index also came in higher than expected. The Conference Board’s consumer sentiment index also increases more than expected.

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.