Texas Daily Ag Market Summary 9/16/14

Posted 10 years 73 days ago by

*** Note: This is the last market summary for the week. Reports will resume on Tuesday, Sept. 23. ***

Feeder cattle mostly steady, few $5 higher; futures lower.
Fed cattle cash trade inactive; formula trades higher; futures mixed; beef prices lower.
Cotton lower.
Corn, grain sorghum, soybeans higher; wheat, rice lower.
Crude oil and natural gas higher.
Stock markets mostly lower.

Texas feeder cattle auctions quoted prices mostly steady, with one location steady to $5 higher, as softer fed cattle and beef prices put a damper on feeders. Several locations noted that the majority of their offerings were unweaned new crop calves, which put even more of a premium on the few weaned, preconditioned calves available. Feeder cattle futures were lower. The fed cattle cash trade was inactive on Monday after trading steady last week, while formula trades, mostly from Friday afternoon, were less than $1 higher. Wholesale boxed beef values were lower again yesterday. Estimated cattle harvest on Monday totaled 115,000 head, unchanged from last Monday, but down 4K from a year ago. Fed cattle futures were mixed, from 50 cents lower per cwt to 30 cents higher.

Cotton prices dropped yesterday, giving back much of last week’s gains, after more details emerged regarding China’s cotton price support program. The new information did not substantially add to existing knowledge, but it did remind traders of China’s huge cotton surplus and higher projected U.S. carryover. USDA NASS reported that the national cotton crop was in 49% good to excellent condition, unchanged from last week and 6 points better than at this time last year. Maybe more important for crop output, only 18% is rated poor to very poor, compared to 24% a year ago. Six percent of the U.S. crop is harvested, compared to 7% on average by this date. In Texas, 34% of the crop was rated good to excellent, down a point from last week and 15% of the acreage has been harvested, somewhat ahead of the 12% average. Reports noted that harvest was mostly finished in the Lower Valley and ginning is expanding in Central Texas.

Corn and grain sorghum prices were higher on Monday in spite of mostly bearish news. Forecasts for a record-large U.S. crop, higher carryover, increasing new crop supplies as harvest advances in the South and weak export inspections pressured prices. However, cool, wet weather in the Corn Belt that could negatively impact the crop was enough to push markets a few cents higher. After markets closed, USDA NASS reported that the U.S. corn crop was in 74% good to excellent condition, unchanged from a week ago. The percentage of the crop rated poor to very poor also held at 7%. Only 27% of the corn acreage was mature, down from the normal 39%, which might stoke fears that an early frost could hurt a late-maturing crop. In Texas, 59% of the corn crop and 66% of the grain sorghum acres have been harvested. The remaining corn crop was rated in 67% good to excellent condition and only 6% poor to very poor. Grain sorghum was 58% good to excellent. Corn export inspections for the week totaled 741,200 metric tons (MT), down 38% from a week ago, but 45% higher than last year.

Wheat prices continued to slide lower in response to the large world supplies and lackluster demand. The recent declines may encourage some end-user purchases, which could give prices a little bump higher in coming days. There were reports of some reports of freeze damage to spring wheat on the Northern Plains, but that won’t have much impact given the burdensome supplies. Weekly export inspections totaling 545,600 MT were up 2% from a week ago, but down 57% from the same week last year. USDA NASS reported that 12% of the U.S. winter wheat crop has been planted, compared to 11% on average by this date. In Texas, only 8% of the acreage has been seeded, down from 15% last year and 12% on average.

Stock markets closed mostly lower yesterday with only the DJ Industrial Average posting a modest gain “as investors turned defensive ahead of this week's decision by the Federal Reserve on interest rates. Adding to the cautious tone was weak economic news out of China, jitters about the Scottish independence vote and the closely watched initial public offering from Alibaba Group Holding Ltd., which could be the world's largest initial public offering.” Tech stocks took the biggest hit, but wire service reports noted that much of the drop was caused by fund managers selling other holdings to make room for Alibaba.

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.