Texas Daily Ag Market Summary 8/22/14

Posted 10 years 98 days ago by

Feeder cattle mostly steady to $5 lower, few $10 lower; futures mostly lower.
Fed cattle cash trade $3 lower; formula trades $3 lower; futures higher; beef prices lower.
Cotton higher.
Grains and soybeans higher.
Crude oil and natural gas higher.
Stock markets higher.

Texas feeder cattle auctions quoted prices mostly steady to $5 lower, with one location as much as $10 lower on heavier weights. Feeder cattle futures were mostly lower, with only the nearby August contract posting a modest gain. The feeder cattle cash index was about $1 lower for the seven days ending 8/20. The fed cattle cash trade fell nearly $3 per cwt from last week’s average to $152 per cwt. That’s off $10 per cwt from the record high set three weeks ago, but still higher than any price recorded prior to the last week in June. Wholesale boxed beef values were lower. Estimated cattle harvest through Thursday totaled 451,000 head, down 5K from last week and 40K below a year ago. Fed cattle futures were higher. Beef export sales for the week totaled 7,300 metric tons (MT), down 23% from the previous week and 41% below the prior four-week average. Japan, South Korea and Canada were the top buyers. Export shipments of 13,500 MT were down 4% from the previous week and 7% lower than the average. The leading destinations were Japan, South Korea and Hong Kong.

Cotton cash prices and futures were higher as this week’s modest decline in crop condition ratings continued to support markets. Ratings have not declined much and are still better than they were a year ago, but it was enough of a drop to give traders a reason to worry. Higher U.S. projected ending stocks and ample world supplies will likely keep a lid on potential price gains, though. World stocks are now the equivalent of 11 months of usage, a more than adequate buffer against any possible production problems this year. Cotton Association of India has forecast the country’s 2014/2015 production at nearly 31 million bales, down 22% from last year, but higher than the current USDA projections. If achieved, the CAI estimate would push India ahead of China as the world’s top cotton producer. Export data were neutral, with sales running ahead of last year’s pace, but shipments lagging behind. Cotton export sales totaling 155,600 bales were down 12% from the previous week, with China, Turkey and Indonesia the primary buyers. A four-week average is not available since the marketing year started on August 1. Cumulative sales for the marketing year have reached 46% of the USDA projected total for the marketing year. Exports of 105,700 bales were up 12% from a week ago. The top destinations were Mexico, Turkey and Vietnam.

Wheat prices were higher yesterday as traders continued to watch European weather/quality concerns and the situation in Ukraine. Export data were neutral, with lower sales, but higher shipments. Wheat export sales totaled 209,200 MT, down 38% from the previous week and 62% lower than the prior four-week average. The Philippines, Nigeria and Japan were the leading buyers. Exports of 532,000 MT were up 6% from a week earlier and 13% higher than the average. The top destinations were the Philippines, Peru and Nigeria.

Corn and grain sorghum prices were higher. A Midwest crop tour is still finding “generally good potential” for a large corn crop this year and export data were mixed, with weak sales and stronger shipments. Corn old-crop export sales for the 2013/2014 marketing year totaled 99,900 MT, up significantly from last week’s net cancellations of 117,100 MT , but down 15% from the prior four-week average. Egypt, South Korea and Columbia were the primary buyers. New-crop sales of 719,300 MT were down 9% from a week earlier and 24% lower than the average. Columbia, Mexico and unknown destinations were the top buyers. Exports of 1,144,300 MT were up 59% from the previous week and 25% higher than the average. South Korea, Mexico and Japan were the leading destinations.

Stock markets closed posted solid gains yesterday, with the S&P 500 reaching a new record high, “ahead of key speeches by Federal Reserve Chairwoman Janet Yellen and European Central Bank President Mario Draghi in Jackson Hole, Wyo., on Friday. Investors will be looking for clues as to the timing of any interest rate increase in the U.S. and the potential for additional easing efforts in Europe. New signals about policy from either Ms. Yellen or Mr. Draghi would likely determine the trajectory of global markets in the weeks ahead. ”

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.