Texas Daily Ag Market Summary 7/29/14

Posted 10 years 122 days ago by

Feeder cattle steady to $10 higher; futures higher.
Fed cattle cash trade inactive; formula trades lower; futures lower; beef prices record high.
Cotton modestly higher.
Corn, grain sorghum, soybeans higher; wheat, rice lower.
Crude oil and natural gas lower.
Stock markets near unchanged.

Texas feeder cattle auctions quoted prices steady to $10 higher, with a couple of the usual reporting locations either not posting a report or not quoting a trend. Oklahoma City was $4-$10 higher on feeders yesterday, with new record high averages for 5-weight and 7-weight steers of $250 and $224 per cwt, respectively. Feeder cattle futures were higher. The market is going to come down at some point, but not yet. As long as fed cattle and beef prices continue to set records themselves and feed grain prices remain low, there is no reason to think we’ve hit a top in the feeder market. The fed cattle cash trade was quiet yesterday across all major U.S. cattle feeding regions with initial asking prices reported at $168-$170 per cwt. Texas formula prices were again lower, bucking the cash market trend. Wholesale beef values set new record highs. Cattle harvest on Monday totaled 111,000 head, down 4K from last week and 7K below a year ago. Fed cattle futures were lower for the two front-month contracts, but higher for deferred months. Speculative profit-taking and “the thin air around record high prices” contributed to the weakness in nearby futures.

USDA NASS issued its weekly Crop Progress reports after markets closed yesterday. Highlights from the report are included in the crop comments below.

Cotton cash prices and futures were modestly higher yesterday as the price declines late last week generated a little buying interest. There were rumors of export sales over the weekend, but nothing confirmed. Otherwise, market fundamentals remain bearish, with large carryover supplies and expectations for large crops this year in the U.S. and India. The Crop Progress report showed another improvement in U.S. cotton condition, with 54% of the crop now rated good to excellent, up 2 points from last week 9 points higher than a year ago. 87% of the crop is squaring and 49% is setting bolls, both slightly behind the 5-year average. In Texas, cotton was rated in mostly fair to good condition, with an overall condition index of 65 points, compared to 56 points at this time last year. Cotton development is a little slower than normal as growers in the Lower Valley prepare to begin harvesting this year’s crop.

Wheat prices slipped lower yesterday after weekly export inspections came in lower than expected at 396,000 metric tons, down 25% from the previous week and 44% below a year ago. USDA NASS reported the U.S. winter wheat harvest 83% complete, slightly ahead of the normal pace. Spring wheat is 93% headed and rated in mostly good to fair conditions. Texas winter wheat harvest has been completed.

Corn and grain sorghum prices were higher as traders became somewhat concerned about dry conditions in parts of the Corn Belt. Forecasts call for the weather to remain relatively cool, but the dryness could reduce yield potential in some areas. Weekly corn export inspections came in lower than the previous week, but well above a year ago. Grain sorghum inspections were higher compared to both periods. After markets closed, USDA NASS reported that 75% of the U.S. corn crop remains in good to excellent condition, down one point from a week ago. Crop development is slightly ahead of last year’s pace. Grain sorghum was 47% headed and in mostly good to fair condition nationwide. In Texas, 38% of the corn crop is mature and farmers are preparing for harvest in Southeast and South Central regions of the state. The crop is rated in mostly good to fair condition statewide, with an overall condition index of 79 points, up 3 points from this time last year. The Texas grain sorghum harvest is 33% complete with the remaining crop also in mostly good to fair condition.

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.