Texas Daily Ag Market Summary 8/6/14

Posted 10 years 114 days ago by

Feeder cattle mixed; futures higher.
Fed cattle cash trade inactive; formula trades higher; futures higher; Choice beef prices higher, Select lower.
Cotton lower.
Grains and soybeans lower, except wheat higher.
Crude oil lower; natural gas higher.
Stock markets lower.

Texas feeder cattle auctions quoted mixed price trends. Several locations were fully steady, while others were $2-$6 higher on light-weight calves under 500 pounds, but steady to $5 lower on heavier weights. Feeder cattle futures were higher. Cull cow prices at Oklahoma City hit another record-high yesterday, averaging a whopping $125.50 and topping out at $145 for high-dressing, 80-85% lean, Boner grade cows. On the other end of the range, low-dressing, 85-90% lean cows bottomed-out at $106. That’s a sign of the extremely tight supplies and continued strong demand for lean grinding beef that are propping-up prices across the beef cattle sector.

The fed cattle cash trade remained inactive in all major U.S. cattle feeding regions, with asking prices holding firm at $164-$165 live in the South and $265 dressed in the North. Texas formula trades were $150 higher. Wholesale boxed beef composite values were slightly higher for Choice cuts, but lower for Select-grade offerings. Estimated cattle harvest so far this week totals 225,000 head, up 2K from last week, but down 12K from last year. Fed cattle futures were higher.

Cotton cash prices and futures were lower on forecasts for beneficial rains in parts of the Cotton Belt. With little fresh news to sustain Monday’s gains, traders refocused on the large work supplies and expectations for large crops in the U.S. and India. Markets are likely to idle along in a fairly narrow range ahead of USDA’s first survey-based yield and production estimates, to be released on Aug. 12. However, Informa Economics said yesterday that cotton production could come in at 16.1 million bales, about 400,000 bales smaller than the current USDA estimate. Informa also lowered its world numbers. The predictions contradict the position taken by other trading firms that the crop could be much larger than current USDA numbers, and will likely leave those other firms scrambling to figure out what Informa sees that they don’t.

Wheat prices were higher again yesterday amid ongoing concerns about crop quality in Europe and tensions in the Ukraine region. Wire service reports noted that stormy weather is delaying harvest and threatening quality in many of Europe’s major wheat-producing countries. However, long-term market fundamentals remain weak and wheat may have a tough time sustaining a prolonged recovery, especially with corn prices struggling, too.

Corn and grain sorghum prices were lower on forecasts for beneficial rains and expectations for large U.S. corn production this year. There was not much new information yesterday and, as with other spring-planted crops, traders are hesitant to make any big moves ahead of next Tuesday’s USDA Crop Production report.

Stock markets closed lower yesterday mostly due to concerns over the situation in Ukraine after a Polish official said that Russian troops are massing at the border with Ukraine and preparing for an invasion. Falling energy stocks led the decline. In the plus side, a U.S. service sector index came in much higher than expected and factory orders were up 1.1% in June, much better than the 0.5% increase expected.

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.