Texas Daily Ag Market Summary 7/22/14

Posted 10 years 129 days ago by

Feeder cattle steady to $6 higher; futures higher.
Fed cattle cash trade inactive; formula trades $1 lower; futures higher; beef prices higher.
Cotton cash prices lower; futures mixed.
Grains and soybeans lower.
Crude oil higher; natural gas lower.
Stock markets lower.

Texas feeder cattle auctions quoted prices steady to $6 higher per cwt. At Oklahoma City yesterday, feeder steers and heifers were steady to $3 higher, but calves were steady to $3 lower. Feeder cattle futures were higher. The market has rebounded from last week’s dip lower and those kinds of fluctuations are to be expected when prices are hovering around record highs. The fed cattle cash trade was inactive yesterday, but formula trades, mostly from last Friday afternoon, averaged $247, dressed, on 53,900 head, down $1 from a week earlier. (The vast majority of fed cattle are priced on a formula or grid basis – last week 65,800 head versus only 700 head of confirmed cash sales – so I will start including net formula prices in this summary. Most formula trades are on a dressed or carcass weight, rather than live weight. As with the feeder cattle auctions, there is a one day lag on the reports. Friday’s trade was reported Monday so it shows up in this summary on Tuesday.) Wholesale boxed beef values were higher. Estimated cattle harvest yesterday totaled 115,000 head, up 3K from last week, but down 4K from a year ago. Fed cattle futures were higher as traders remained focused on the short cattle supplies.

Cotton cash prices were modestly lower and futures were narrowly mixed. There was little fresh news to move the market so prices stayed within a fairly narrow range throughout the day and across futures contract months. Friday’s USDA AMS cotton review showed the normal range of insect and weather issues across the Cotton Belt, but nothing major popped up and there is still strong potential for a large crop this year. As noted a week ago, the first bale of U.S. cotton for the season was delivered to a gin in La Feria in the Lower Valley on July 3 and harvest is expected to begin in earnest in the region within the next couple weeks. After the market closed, the USDA crop progress report showed 85% of the U.S. cotton acreage squaring and 38% setting bolls, both slightly ahead of normal. 52% of the crop was rated in good to excellent condition, down one percentage point from last week, and 34% was rated fair, up a point. In Texas, 81% of the acreage is squaring, ahead of normal, and 24% setting bolls, slightly behind normal. 37% of the crop is rated good to excellent and 40% is rated fair, with an overall condition index of 63 points, compared to 52 at this time last year.

Wheat prices were lower yesterday as increasing new-crop supplies add to already-burdensome world stockpiles. Weekly export inspections totaled a respectable 515,300 metric tons, up 33% from the previous week, but down 22% from a year ago. USDA reported the U.S. winter wheat harvest 75% complete, equal to the 5-year average. Spring wheat is 84% headed, down a point from the average. In Texas, 100% of the wheat crop has been harvested, slightly ahead of the normal pace.

Corn and grain sorghum prices were lower. As with other crops, there was not any fresh news to move the market, and when that happens, prices usually slip. Traders are keeping an eye on the weather, but there is nothing threatening in the forecast at this point. Weekly corn export inspections were “decent,” down 1% from a week ago, but nearly 4 times higher than the same week last year. After markets closed, USDA reported that the portion of the U.S. corn crop rated in good to excellent condition remained unchanged from a week ago at 76%. That’s the highest rating since 1993 for this week and much better than the 63% at this time last year. In Texas, corn is in mostly good to fair condition, with an overall rating index of 80 points, compared to 75 points at this time last year. As for development progress, 91% of the acreage is silked, well ahead of the normal 85%, but only 29% is mature, well below the average 42%. Texas grain sorghum is 88% headed, ahead of normal, and 23% harvested, behind normal.

Stock markets closed lower yesterday, but were well above session lows. With no economic reports, traders focused on weak corporate news and international tensions. McDonald’s and Yum Brands (Taco Bell, KFC, Pizza Hut, and Wing Street) fell after they suspended purchases in China after reports that a Chinese supplier sold expired chicken and beef to restaurants there. Traders also remained concerned about conflicts in the Middle East and Black Sea regions.

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.