Texas Daily Ag Market Summary 9/10/14

Posted 10 years 79 days ago by

Feeder cattle mostly $1-$10 higher; futures higher.
Fed cattle cash trade inactive; formula trades $1 lower; futures higher.
Choice beef prices lower, Select higher.
Cotton higher.
Grains and soybeans lower.
Crude oil and natural gas higher.
Stock markets lower.

Texas feeder cattle auctions quoted prices mostly $1-$10 higher per cwt as markets continue to rebound from their late August slide. As noted in previous reports, prices are going to fluctuate, but should remain at historically-high levels because of the tight supplies and continued robust beef demand. Last week’s Texas direct feeder cattle price for 650 lb. to 850 lb. steers was up 41% from a last year and 52% higher than two years ago. This week at Oklahoma City, 5-weight steers were up 52% from a year ago and 71% higher than in 2012, while 7-weight steers were up 47% and 63%, respectively. Culled slaughter cows have not missed the ride either, with the OKC average up 45% from last year and 65% from two years ago.

The fed cattle cash trade was inactive yesterday, with asking prices firming up at around $167-$168, up $5-$7 from last week’s average. Wire services commented that, after last week’s price surge, cattle owners are not going to take a chance on pricing their offerings too cheaply. Texas formula trades were $1 lower. Wholesale boxed beef values were modestly lower for Choice cuts, but higher for Select-grade offerings. Estimated cattle harvest through Tuesday totaled 231,000 head, up 110K from last week’s holiday-shortened run, but down 14K from a year ago. Fed cattle futures were higher.

Dr. Darrell Peel, Oklahoma State University cattle economist, said yesterday that, “International cattle and beef markets are reacting as expected to record U.S. market prices. The latest monthly trade data for July confirms that beef exports are declining; and beef and cattle imports are increasing as markets adjust to shrinking U.S. beef and cattle supplies.” High U.S. prices have also pulled in more feeder cattle imports from Mexico and Canada. Click here for his full article.

Cotton cash prices and futures were higher. Many traders expect USDA to hold unchanged or reduce its production forecast in tomorrow’s Crop Production report, with one notable exception. Well-regarded analytics firm Informa Economics expects an increase. In addition to the pre-report positioning, Australia reduced its production forecast by 1.1 million bales, but it’s still nearly 200,000 bales higher than the current USDA projections. The drop was partially offset by a 500,000 bale increase in Pakistan.

Corn and grain sorghum prices were lower ahead of tomorrow’s USDA Crop Production report. It looks like traders anticipate an upward adjustment in corn production and carryover stocks forecasts. There is still a chance of frost in the forecast for the upper Corn Belt, “but the severity and coverage is not a big concern.” International news was mixed, with talk of higher corn production in Brazil, but lower output in China.

Wheat prices were also lower mostly due to spillover pressure from other crops and the stronger dollar. Traders are still keeping an eye on Ukraine, but the situation there has not yet translated into any significant new business for U.S. exporters. Australian wheat growing areas reportedly received a little rain.

Stock markets closed lower yesterday, though reports could not seem to pin the losses on any particular set of causes. There was some profit-taking following the recent rise in stock values and traders remain concerned that the Federal Reserve could soon begin raising interest rates. Apple stock rose most of the day after it unveiled the iPhone 6 and its new smart watches, but slid lower late to end the day down 0.4%.

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.