Texas Daily Ag Market Summary 9/3/14

Posted 10 years 86 days ago by

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

Texas feeder cattle auctions quoted prices steady to $5 higher and feeder cattle futures were higher. The fed cattle cash trade has been inactive so far this week after posting a solid $3 gain last week. Reports put initial asking prices this week at $158-$160 per cwt, up $3-$5 from last week’s average. Formula trades were lower. Wholesale beef values were lower, but the declines were a little smaller than in the past several days. Estimated cattle harvest through Tuesday totaled 121,000 head, down 111K from last week because of the Monday holiday and down 9K from a year ago. Fed cattle futures were higher. There was talk that some packers are very short-bought coming out of the holiday and might be scrambling for inventory.

Cotton cash prices and futures were lower following reports of beneficial rains in India and a stronger dollar that makes U.S. cotton more expensive to foreign buyers. In addition, the International Cotton Advisory Committee raised its projected ending stocks estimate to 7.85 million bales, well above USDA’s current 5.04 million bale forecast. USDA AMS said that dryland cotton fields in West Texas “continued to struggle under hot, dry conditions.” Separately, USDA NASS reported that 50% of the U.S. crop is rated in good to excellent condition, down a point from last week, but better than the 45% at this time last year. Only 16% of the crop is rated poor to very poor, unchanged from a week ago. U.S. cotton is progressing at a faster than normal pace, with bolls opening on 31% of the acreage compared to 27% on average. In Texas, 35% of the crop is rated in good to excellent condition, also down a point from last week, and 25% is poor to very poor, up a point. Bolls are opening on 33% of the acreage, well above average, and 9% of the crop is harvested.

Wheat prices were lower yesterday as ample world supplies continue to keep a lid on any potential gains. There are concerns about the quality of the spring wheat harvest in the U.S., Canada and Europe, and traders are still keeping an eye on tensions in Ukraine. However, none of that has generated much new business for U.S. wheat. Wheat export inspections were up 34% from a week earlier but down 23% from a year ago. Texas farmers are getting ready to plant this year’s winter wheat crop.

Corn and grain sorghum prices were lower, mostly due to a stronger dollar and spillover from wheat. Expectations for a record-large U.S. crop continue to pressure the market. Wire service reports noted that “The early (corn) yield numbers are good, but there are a few concerns about rain delaying harvest activity in some areas, and some of the crop is developing slower than average.” Weekly corn export inspections were down 21% from a week ago, but nearly double last year. USDA NASS reported that 74% of the U.S. corn crop was rated in good to excellent condition, up one point from a week ago. Only 7% of the crop was in poor to very poor condition, unchanged from last week, and much lower than the 16% at this time last year. Texas corn was rated 67% good to excellent, up 2 points from a week ago and 55% of the crop has been harvested, equal to the five year average. U.S. grain sorghum was also in mostly good condition. The Texas grain sorghum crop is 64% harvested.

Stock markets closed mixed on Tuesday, with some indexes modestly higher and some modestly lower. There was some profit-taking after the recent gains, while economic data were bullish. A leading economic index came in much higher than expected at its highest level since March 2011. The Commerce Department reported that construction spending rose 1.8% during July, beating expectations for a 0.9% increase. On the corporate front, Home Depot stock fell after it said it is investigating a potential data breach.

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.