Texas Daily Ag Market Summary 8/28/14

Posted 10 years 92 days ago by

Feeder cattle mostly steady to $6 lower, few higher; futures higher.
Fed cattle cash trade inactive; formula trades $1 higher; futures higher; beef prices lower.
Cotton cash prices unchanged; futures higher.
Corn, grain sorghum unchanged to higher; wheat, soybeans higher.
Crude oil and natural gas higher.
Stock markets near unchanged.

Texas feeder cattle auctions quoted prices mostly steady to $6 lower, though one location was steady to $5 higher. Feeder prices have dropped from record highs over the past couple weeks, along with fed cattle and beef values. However, the tight supply picture remains unchanged and demand is holding up well. Feeder cattle futures were higher yesterday. The fed cattle cash trade remained inactive across all major U.S. cattle feeding regions. Texas feedlot operators passed on packer bids of $152, even money with last week, and held firm to asking prices around $156. Both sides would likely prefer to do business earlier in the week than usual ahead of the Labor Day weekend. Formula sales were more than $1 higher. Wholesale beef values were lower. Estimated cattle harvest through Wednesday totaled 346,000 head, up 7K from last week, but down 18K from a year ago. Fed cattle futures were higher.

Cotton cash prices were unchanged and futures were modestly higher in spite of mostly-bearish news. The Chinese Cotton Association forecast said production is expected to total 30.9 million bales, down 3.5% from a year ago, but about 1 million bales higher than the current USDA projection. In addition, there is a 20%-30% chance of rain in the forecast for parts of the Texas High Plains that could benefit cotton in the area.

Wheat prices were higher as the market continues to fluctuate in a narrow range, up a few cents one day, down a few the next. There are concerns about harvest delays and subsequent quality issues in U.S. and European spring wheat areas and the situation in the Black Sea region remains unsettled, with Russian troops now confirmed in eastern Ukraine. However, ample global supplies and slack demand continue to keep a lid on any potential gains.

Corn and grain sorghum prices were unchanged to modestly higher with no fresh news to move the market much in either direction. Harvest is nearly half complete here in Texas so new-crop supplies are starting to enter marketing channels. That could put some additional downward pressure on prices.

This week’s U.S. Drought Monitor (click here for the Texas map or here for the U.S. map and summary) showed a modest deterioration in conditions in Texas with 83% of the state now in some degree of drought or abnormal dryness, up 2 points from a week ago. By drought category, the areas rated in severe and extreme drought expanded, the percentage in moderate drought declined, and the abnormally dry and exceptional drought areas remained near unchanged. The drought-free area in East got smaller. Nationally, the total acreage experiencing abnormal dryness or some degree of drought held steady at 48% percent of the contiguous states.

Stock markets closed near unchanged yesterday. With no economic reports for the day, traders focused on corporate news. Several retail stocks were higher after earnings and revenues came in higher than 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.