Texas Daily Ag Market Summary 8/12/14

Posted 10 years 108 days ago by

USDA will release its monthly Crop Production report and World Agricultural Supply and Demand Estimates later this morning. Highlights will be included in tomorrow’s daily market summary. The reports will impact crop markets today and for several days as prices adjust to the latest USDA figures.

Yesterday,

Feeder cattle mostly steady; futures higher.
Fed cattle cash trade inactive; formula trades lower; futures higher; beef prices lower.
Cotton higher.
Corn, grain sorghum, soybeans higher; wheat, rice lower.
Crude oil and natural gas higher.
Stock markets higher.

Texas feeder cattle auctions quoted prices mostly steady, though one location was $3-$5 lower. At the Oklahoma City National Stockyards, feeder cattle were $2-$10 lower, with the largest decline on cattle weighing over 800 pounds. Calves were $10-$20 lower in a light market test. Feeder cattle futures were higher, though the increase did not quite make up for Friday’s limit-down loss. The fed cattle cash trade was inactive on Monday and formula prices were about $3 lower on a dressed basis. Cash asking prices were reported at about $160-$162, up $1-$3 from last week. Estimated daily cattle harvest for Monday totaled 114,000 head, up 4K from a week ago and unchanged from last year. Wholesale boxed beef values were lower. Fed cattle futures were higher. Some observers noted that cattle prices might be trying to stabilize at or near current levels as markets cannot keep setting new records indefinitely. I would expect prices to continue to bounce around, but the range might narrow a little. Meanwhile, futures prices recovered somewhat from the steep sell-off late last week. The drop, which pulled cash prices lower, too, was mostly caused by speculative traders reacting to the Russian import ban on U.S. meat, but was overdone given the almost-nonexistent beef sales to Russia. Supply/demand fundamentals should take over and right the ship. One reporter noted, “The ban is little more than a side show to the global beef market. Beef frequently takes many circuitous routes to a destination. For years Vietnam figured to be a unusually large beef eating nation until it became understood that it was a back door for beef movements into China.”

Cotton cash prices and futures were higher yesterday as traders staked out positions ahead of today’s USDA reports. Analysts surveyed by the Wall Street Journal expect the production forecast to come in higher than previous projections. Reports also noted that rain on the Texas High Plains mainly fell on irrigated cotton areas and left dryland areas relatively untouched. There is a little more rain in the forecast before hot, dry conditions return. Yesterday’s USDA Crop Progress report showed U.S. cotton rated in 52% good to excellent condition, down 1 point from a week ago. Another 34% was rated fair. 83% of the acreage was setting bolls and 7% has bolls opening. In Texas, the crop was rated 37% good to excellent, also down a point from last week, with another 41% rated fair. Nearly all the acreage is setting bolls, 78% is squaring and 11% had bolls opening. Both the Texas and U.S. crops are progressing at a near-normal pace. Harvest was reportedly getting started in South Texas and the Coastal Bend.

Wheat prices were lower yesterday after reports of beneficial rains on the U.S. Southern Plains and dimming prospects that turmoil in the Black Sea region will do much to boost U.S. export prospects. Traders are expecting USDA to raise its 2014 forecast of all wheat production. After markets closed for the day, USDA NASS reported that the U.S. winter wheat harvest was 95% complete, ahead of the normal 90% for this time of the year. Spring wheat is 6% harvested and rated in mostly good condition. Texas growers are preparing for fall seeding of the 2014/15 crop.

Corn and grain sorghum prices were modestly higher yesterday as beneficial rains in the western Corn Belt were partially offset by a decline in export inspections. Traders expect USDA to raise its corn production forecast from a month ago. Late in the day, USDA NASS reported that 73% of the national corn crop was rated in good to excellent condition, up one point from a week ago. 96% of the crop has silked and 11% is in dent-stage. In Texas, 65% of the corn acreage was rated in good to excellent condition, a two point improvement over last week. Half the acreage is mature and 17% has been harvested. U.S. grain sorghum was 30% mature, with the crop rated in mostly good to fair condition. Texas grain sorghum was 82% mature and 46% harvested and was also rated in mostly good to fair condition.

Stock markets closed higher yesterday with little fresh news to give firm direction one way or the other. Investors generally felt good about U.S. second quarter growth and corporate earnings, Ukraine was not making headlines and Iraqi insurgents had been dealt a setback.

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.