Texas Daily Ag Market Summary 9/8/14

Posted 10 years 81 days ago by

Feeder cattle mostly $1-$5 higher, few $15 higher; futures higher.
Fed cattle cash trade $8 higher; formula trades $1 higher; futures higher; beef prices higher.
Cotton lower.
Grains and soybeans mostly higher, except rice futures lower.
Crude oil and natural gas lower.
Stock markets higher.

Texas feeder cattle auctions quoted prices mostly $1 to $5 higher per cwt, with one location as much as $15 higher on lighter-weight stockers. Feeder cattle futures were higher. The Texas fed cattle cash trade was nearly $8 higher in very light confirmed trade on Friday. However, that number also held up through Kansas and points-north as packers scrambled to line up the supplies they need to keep processing lines moving. Formula trades were $1 higher. Wholesale boxed beef values were higher for the third consecutive day following several weeks of declines. Estimated cattle harvest for the week totaled 518,000 head, down 66K from a week ago and 57K lower than last year. Cumulative cattle harvest is running 7.1% behind a year ago. Futures followed cash markets higher. Beef exports totaled 10,200 metric tons (MT) down 4% from the previous week, but up 4% from the prior four-week average. Mexico, Japan and Hong Kong were the leading buyers. Export shipments of 12,700 MT were down 9% from a week earlier and 10% below the average. The top destinations were Japan, Hong Kong and Mexico.

Cotton cash prices and futures were lower, largely due to disappointing exports data. Improved rain chances on the Texas High Plains and rumors out of China also contributed to the decline. China is still fleshing-out its cotton policies, but they are now rumored to include more incentives for mills there to purchase domestic cotton and stricter controls on imports. Export data were mostly bearish, with both sales and shipments well below the weekly averages needed to meet USDA projections for the marketing year. Cotton export sales totaling 82,900 bales were down 7% from the previous week and 43% lower than the prior four-week average. Turkey, South Korea and Indonesia were the primary buyers. Exports of 104,200 bales were up 8% from a week ago, but down 6% from the average, with Turkey, China and Mexico the leading destinations.

Wheat prices were higher due to ongoing concerns about the quality of the U.S. and European spring wheat crops and tensions in Ukraine. Neither situation is anything new, but they’re still enough to keep a lid on the market. Export data were mixed, with disappointing sales, but strong shipments. Wheat export sales for the week totaled 168,800 MT, down 58% from the previous week and down 56% from the prior four-week average. Mexico, the Philippines and Yemen were the top buyers. Shipments of 747,600 MT were up 60% from a week earlier and 56% higher than the average, with Brazil, Mexico and the Philippines the leading destinations.

Corn and grain sorghum prices were higher amid concerns about a chance of frost in the Northern Corn Belt, with some carryover support from higher soybeans and wheat. However, conditions still favor a large corn crop this year and market fundamentals remain bearish. Export data did not help, with weak sales and only slightly higher shipments. Corn export sales for the old crop 2013/2014 marketing year were again a net negative 7,500 MT as cancellations outweighed new sales for the second consecutive week and third of the past four. Corn sales for the new crop 2014/2015 year of 525,600 MT were down 24% from a week earlier and down 29% from the prior four-week average. Unknown destinations, Mexico and Columbia were the top buyers. Exports of 1,022,600 MT were up 2% from the previous week and 5% higher than the average. The primary destinations were Mexico, Japan and South Korea. Grain sorghum sales totaled 111,900 MT and shipments were 217,600 MT, all to China.

Stock markets closed higher on Friday with the S&P 500 setting a new record high for the 33^rd time this year. As has happened several times recently, bad economic news pushed stocks higher. The Labor Department reported that the economy added only 142,000 jobs during August, well short of expectations for a 225,000 increase. In addition, employments numbers for the past two months were also revised lower by a combined 28,0000. The unemployment rate did slip little lower to 6.1% as the labor participation rate declined to its lowest level in 36 years. The bad news for the economy was taken as good news for stocks as it means the Federal Reserve will likely delay raising interest rates or further curtailing its asset purchases.

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.