Texas Daily Ag Market Summary 7/14/14

Posted 10 years 137 days ago by

Feeder cattle steady to $8 higher; futures lower.
Fed cattle cash trade $2 lower; futures higher; Choice beef prices lower, Select higher.
Cotton lower.
Grains and soybeans lower.
Crude oil lower; natural gas higher.
Stock markets higher.

Texas feeder cattle auctions quoted prices steady to $8 higher, but feeder cattle futures slipped lower for the second day as lower fed cattle spooked the market. There was also some speculative profit-taking and reports noted that technical traders saw something negative in their charts that put them in sell mode. Supply/demand fundamentals remain very supportive, with tight supplies expected to persist until Mother Nature allows the cow herd to be rebuilt. The fed cattle cash trade averaged $155.50 per cwt, down more than $2 from the previous week’s record high. Wholesale boxed beef values were lower for Choice offerings, but higher for Select-grade cuts. The estimated cattle harvest for the week totaled 576,000 head, up 85K from last week’s holiday-shortened run, but down 65K from a year ago. Cumulative cattle harvest year-to-date is down 6.6% from the same period last year. Fed cattle futures were higher, but the nearby August contract is still priced at a considerable discount to cash.

USDA released its monthly World Agricultural Supply and Demand Estimates (WASDE) and Crop Production reports on Friday. The reports, and how results compared to pre-report expectations, accounted for most of Friday’s crop price movements.

Cotton cash prices and futures were lower on Friday after USDA 2014/14 cotton production and projected ending stocks came in higher than expected. Production is now projected at 16.5 million bales, up 10% from last month’s projection, 28% higher than a year ago and higher than the top end of pre-report expectations. The agency did adjust 2013/14 old crop ending stocks lower, but not as much as expected. Projected world ending stocks were also adjusted higher. The higher U.S. production was partially offset by lower production in India, Australia and Brazil.

Wheat prices were lower after “USDA made major adjustments to the 2014/15 balance sheet. Larger supplies were accompanied by lower exports and feed demand, which increased stocks some 15% from last month. Additionally, global supplies were increased” which pushed projected ending stocks higher. Forecast 2014 all wheat production totaled 1.99 billion bushels, down 1% from last month’s forecast and 11% lower than last year, but still on the high side of pre-report expectations. Texas winter wheat production is expected to total 55 million bushels, down 16% from a year ago. Click here for more details from USDA on the Texas crop, including Agricultural Statistics District estimates. Projected U.S. ending stocks came in higher than expected and world carryover stocks were also increased from a month ago. It all added up to a bearish report for a crop that was already laboring because of ample global supplies and lackluster demand.

Corn and grain sorghum prices followed other grains and soybeans lower in spite of a somewhat more favorable supply/demand report. For corn, USDA held corn yield unchanged from a month ago, but lowered projected planted and harvested acres. The resulting production of 13.86 billion bushels was down about a half a percent from both last year and last month’s forecast and on the low side of pre-report expectations. Lower feed usage estimates and higher carry-in stocks resulted in higher projected ending stocks that were very near pre-report expectations. For grain sorghum, USDA increased its projected planted and harvested acres, feed usage and exports. The net result was higher projected carry-over stocks.

Stock markets closed modestly higher on Friday with no economic reports and little corporate news to move traders much in either direction.

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.