Texas Daily Ag Market Summary 9/5/14

Posted 10 years 84 days ago by

Feeder cattle steady to $10 higher; futures higher.
Fed cattle cash trade inactive; formula trades $2 higher; futures higher; beef prices higher.
Cotton cash prices unchanged; futures mostly lower.
Wheat higher; corn, grain sorghum and soybeans lower.
Crude oil and natural gas lower.
Stock markets modestly lower.

Texas feeder cattle auctions quoted prices steady to $10 higher, with the biggest gains on lighter weight steers and heifers. Feeder cattle futures were higher. The fed cattle cash trade remained inactive in Texas, but a few head traded in IA and NE at $158-$160. USDA noted that the volume was not sufficient to develop a good market test and that most cattle owners were still passing on packer bids. Texas formula trades were $2 higher. Wholesale beef values were higher. Estimated cattle harvest through Thursday totaled 358,000 head, down 102K from a week ago and 26K below a year ago. Fed cattle futures were higher.

The weekly export sales report was delayed until this morning because of Monday’s holiday.

The dollar gained strength yesterday after the European Central Bank “unexpectedly cut ultra-low interest rates and said it would start buying loans and bonds next month.” That added pressure to commodity markets as a stronger dollar makes U.S. goods more expensive for foreign buyers.

Cotton cash prices were unchanged, but futures were mostly lower, with only the nearby October contract posting a very modest gain. Rain chances on the Texas Plains, expectations for a large global crop, the stronger dollar and increasing supplies of new-crop cotton contributed to the decline.

Wheat prices bucked the crop sector trends to push higher yesterday. Market fundamentals have not changed much with ample supplies, soft demand and concerns about the quality of the spring wheat crop contributing to the seesaw market movements. As we’ve seen recently, any dip in prices perks up buying interest, which then pushes prices a little higher, but then demand dries up and prices dip a little lower again.

Corn and grain sorghum prices were lower as prospects for a record-large corn crop this year continue to weigh on the market. New-crop supplies are starting to hit the market, adding to the pressure. Forecasts for the northern Corn Belt are starting to mention a chance of frost next week and higher ethanol production remains supportive.

Stock markets were modestly lower yesterday ahead of this morning’s monthly employment report. It’s expected to show that the economy added 225,000 jobs during August and traders were concerned that a strong employment showing could prompt the Federal Reserve to cut back its stimulus programs. The European interest rate cut and asset purchases noted above also contributed to the decline. Meanwhile, economic data were mostly bullish. The Labor Department reported that new unemployment claims last week totaled 302,000, slightly more than expected. As wire service reports noted, “Initial jobless claims aren't improving but are steady at low levels.” The Commerce Department reported that the U.S. trade deficit shrank slightly during July, coming in a little lower than pre-report expectations. A pair of service sector indexes and a consumer sentiment index all came in better than expected. Separately, the government also said that second quarter productivity and labor costs declined more 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.