Texas Daily Ag Market Summary 7/9/14

Posted 10 years 142 days ago by

Feeder cattle $1-$10 higher; futures lower.
Fed cattle cash trade inactive; futures lower; beef prices higher.
Cotton cash prices unchanged; old crop futures higher, new crop lower.
Grains and soybeans mostly lower, except rice futures higher.
Crude oil and natural gas lower.
Stock markets lower.

Texas feeder cattle auctions quoted prices $1-$10 higher per cwt, but feeder cattle futures retreated from Monday’s record highs, mostly due to the softness in fed cattle futures. The fed cattle cash trade was at a standstill yesterday across all major U.S. cattle feeding regions, with feedlot asking prices at $160 per cwt, but no word yet on packer bids. Wholesale boxed beef prices jumped to new record highs on Tuesday, with Choice grade offerings averaging just short of $250 per cwt, 27% higher than at this time last year. Estimated cattle harvest through Tuesday totaled 229,000 head, down 3K from last week and 13K below a year ago. Fed cattle futures were lower due to speculative activity and profit-taking.

Cotton cash prices were unchanged, but futures were mixed, with the nearby July old-crop contract modestly lower and new-crop contracts modestly higher. Ongoing prospects for a larger crop this year and massive world cotton reserves continue to keep a lid on the market, but there are also growing concerns about a deficit monsoon season in India. The country already announced it would reduce grain exports to protect its domestic supplies and is expecting cotton production to also come in lower than earlier projections. However, the country also said recently that it plans to boost exports well beyond current USDA projections. Typically-confused information, likely from different officials or ministries. We’ll just have to wait and see how things play out, but a weak monsoon season is about the only bullish news out there in an otherwise bearish environment.

A poor monsoon season in India could also be bullish for U.S. rice and wheat. India is the world’s largest rice exporter and had started exporting more wheat over the past few years. It has already cancelled plans to auction 5 million metric tons of rice from government stockpiles and put wheat exports on hold. That could open more market opportunities for U.S. grains.

Wheat prices were lower again yesterday as traders remained focused on the large world supplies and lackluster demand. Harvest issues in the U.S. have already been priced into the market so it will take a significant increase in demand or some sort of supply shock to bring the market out of its slide. There have been a few reports of harvest delays in Russia and Black Sea exports could suffer because of the political unrest in the region. However, wire service reports also noted yesterday that higher shipping rates could also increase costs for U.S. wheat and give the advantage to suppliers that are closer to major Middle East buyers.

Corn and grain sorghum prices were also lower as weather remains favorable for a large U.S. crop. Corn crop condition ratings are the best for this time of year since the 1990’s, which makes higher yields a strong possibility. Lower soybean prices have also contributed to the decline.

Stock markets were lower yesterday as traders anticipated the start of the second quarter earnings season. However, after the market closed, Alcoa kicked things off with higher than expected profits on better than expected revenues, which should give stocks a boost today. In trading yesterday, riskier tech and small company stocks experienced the most 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.