Texas Daily Ag Market Summary 7/15/14

Posted 10 years 136 days ago by

Feeder cattle mostly steady to $5 lower; futures mostly lower.
Fed cattle cash trade inactive; futures lower; beef prices lower.
Cotton cash prices unchanged; futures mostly higher.
Grains and soybeans mixed.
Crude oil and natural gas modestly higher.
Stock markets higher.

Texas feeder cattle auctions quoted prices mostly steady to $5 lower, with a few steady to $4 higher. Feeder cattle futures were mostly lower, with only the nearby August contract posting a very modest increase. A little weakness has crept into the feeder market over the past several days, with most of the decline reportedly tied to speculative and technical selling, rather than any change in fundamentals. The fact is that cattle supplies remain very tight and will likely get tighter. As several observers have noted, buyers are pulling forward cattle purchases, which will probably reduce uncommitted supplies later. Add in the increased heifer retention and reduced cow slaughter and the stage is set for even tighter supplies. To top it off, Oklahoma State University beef cattle economist Darrell Peel said in a column yesterday that he expects feeder cattle imports from Mexico to decline in the second half of the year, which will further restrict supplies. The high prices here pulled more cattle across the border at lighter weights, which leaves fewer to ship for the rest of the year.

The fed cattle cash trade was inactive yesterday across all major U.S. cattle feeding regions. Reports noted smaller feedlot show lists this week with cattle prices at $158, up $2.50 from last week and equal to the previous week’s record high. Wholesale boxed beef values were modestly lower yesterday, which could (or could not) suggest that prices are starting to level off following the July 4 peak to the grilling season. (Evidently “grilling season” is a pretty narrow window for the folks up north that write many of the wire service reports. It’s apparently too cold before Memorial Day and too hot after July 4. Go figure.) Estimated cattle harvest yesterday totaled 112,000 head, equal to last week, but down 6K from a year ago. Fed cattle futures were lower, also due to speculative “long liquidation and technical selling.”

Cotton cash prices were unchanged, but futures were modestly higher, with only the nearby October contract posting a modest decline. Reports that Chinese mill use will likely expand for the first time in several years was enough to give the market a little bump yesterday. However, prices are stuck below 70 cents as conditions continue to favor a larger 2014 U.S. crop. Nationally, 70% of the cotton acreage is squaring and 24% is setting bolls, both slightly behind the normal progress for this time of year. 53% of the crop was rated in good to excellent condition, down 2 points from past week, but still much better than the 42% in those categories at this time last year. In Texas, development is also a little slower than average, with 59% of the crop squaring, 15% setting bolls and bolls opening on 1%. The crop was rated in mostly fair to good condition with an overall condition index of 64 points, up 12 points from last year.

Wheat prices were higher yesterday , though there did not appear to be much fundamental support for the move. Weekly export inspections were down 20% from a week ago and 43% below a year ago. The winter wheat harvest is picking up steam with 69% of the acreage now harvested, up slightly from both last year and the average. Spring wheat is 69% headed and 70% of the crop is rated in good to excellent condition, unchanged from both last week and last year. In Texas, 99% of the winter wheat acreage is harvested, ahead of the normal 97%, with the remaining acreage in mostly poor to very poor condition.

Corn and grain sorghum cash prices were lower and futures were mixed, with the expiring July corn contract lower and new-crop contracts higher. Parts of the Midwest are expecting cooler temperatures this week and that seems to have been enough to give the market a small boost. However, fundamentals still point to a large crop and weak prices. Nationally, 34% of the acreage is silking, compared to 33% on average and 15% last year. 76% of the crop was rated in good to excellent condition, up one point from last week and well above the 66% at this time a year ago. Export inspections were down 27% from a week earlier, but more than double the same week last year. In Texas, 81% of the acreage is silking, compared to 78% on average and 15% is mature, compared to the normal 33%. The crop is rated in mostly good to fair condition with an overall rating index of 82 points, compared to 73 points last year. Grain sorghum is 30% headed nationally, slightly more than average, with the crop rated in mostly good to fair condition. The Texas crop is 65% headed, slightly ahead of normal, and 15% harvested, well behind the 22% average.

Stock markets closed higher after Citigroup announced a $7 billion settlement with the federal government over its lending practices leading up to the financial crisis. The bank said its second quarter profits dropped 96% because of the settlement, but excluding those charges, earnings matched expectations. There were no economic reports released yesterday.

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.