Texas Daily Ag Market Summary 7/28/14

Posted 10 years 123 days ago by

Feeder cattle steady to higher; futures higher.
Fed cattle cash trade record high; formula trades lower; futures higher; beef prices record high.
Cotton lower.
Grains and soybeans mostly higher, except rice futures lower.
Crude oil higher; natural gas lower.
Stock markets lower.

Texas feeder cattle auctions quoted prices steady to as much as $10 higher per cwt, with one location as much as $20 higher on lighter-weight feeders. Feeder cattle futures were higher. The fed cattle cash trade held steady at a record-high $161-$162 per cwt, while formula sales drifted $1 lower on Friday to $244 per cwt (dressed weight). Wholesale boxed beef values also surged to new record highs Friday. Estimated cattle harvest for the week totaled 571,000 head, down 6K from the previous week and 69K below a year ago. Cumulative harvest for the year is running 6.9% lower than a year ago. Fed cattle futures followed cash markets higher.

The USDA Cattle on Feed report released on Friday showed 10.1 million head of cattle on feed in feedlots with 1,000 or more head as of July 1, down 2% from a year ago, but equal to pre-report expectations. Placements on feed during June were down 6%, compared to expectations for a 4% decline, and marketings for slaughter were down 2%, equaling expectations. The Texas cattle on feed inventory was down 3% from a year ago to 2.5 million head. Texas remains the largest cattle-feeding state in the nation.

Also on Friday, USDA released its July 1 Cattle inventory report. No comparisons to last year or pre-report expectations were available because the report was not done last year due the federal budget sequestration. Compared to 2 years ago, the total inventory of cattle and calves totaled 95 million head, down 3% and the lowest July 1 total since the series began in 1973. The beef cow inventory was also down 3% and beef replacement heifers were down 2%. The 2014 calf crop is expected to decline 1% from a year ago and 2% from 2012.

Cotton cash prices and futures continued to drop, with wire services noting that the nearby futures contract at its lowest point since October 2009 and lower than both the 10-year and 20-year averages. Conditions still favor a large U.S. crop and reports Thursday that India may harvest a record-large crop this year sent markets tumbling.

Corn and grain sorghum prices were higher as buying interest picked up a little following recent declines. News of an export sale to Mexico was also encouraging.

Wheat prices followed corn higher as supply/demand fundamentals remain bearish. There were a few reports of winter wheat harvest delays, but the Wheat Quality Council’s spring wheat tour projected a record-high yield on the Northern Plains.

Stock markets were lower on Friday mostly due to a round of disappointing corporate news. Visa lowered its annual growth forecast. General Motors reported an 80% drop in second-quarter profits because of costs associated with its recalls. Starbucks stock fell even though it reported better than expected quarterly results. On a more positive note, the Commerce Department reported that orders for durable goods rose by 0.7% during June, beating expectations for a 0.5% increase.

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.