Texas Daily Ag Market Summary 9/23/14

Posted 10 years 66 days ago by

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

Texas feeder cattle auctions quoted prices mostly steady on Friday and Saturday compared to the previous week’s sales, with a few locations $2-$5 higher on at least a portion of their offerings. Demand remains strong for feedlot replacements and stockers to turn out on fall/winter grazing. As usual for this time of year, auctions are seeing increasing numbers of fleshy, unweaned or short-weaned calves and, also as usual, they’re being discounted as much as the market will bear because of the their higher risk of health issues. Feeder cattle futures were mostly higher yesterday following a dip in grain futures. The fed cattle cash trade was inactive on Monday after trading $2 lower last week on a very light volume. Initial asking prices this week are about $160. Formula trades were steady. Wholesale beef values continued to slide lower. Estimated daily cattle harvest totaled 116,000 head, up 1K from last week, but down 6K from a year ago. Fed cattle futures were mixed, from 20 cents lower to $1.20 higher.

Cotton prices fell yesterday after China said it will not offer cotton import quota beyond the 4.1 million bale minimum required by the World Trade Organization in order to begin reducing its huge stockpiles. Last year, China imported 14 million bales and they were expected to import 8 million this year. Sources noted that the decision still allows mills to apply for additional quota “if value-added goods made from the imported cotton are re-exported.” They could also import cotton by paying the full 40% duty applied to non-quota cotton. USDA expects other cotton importing countries to take up some of the slack, but the anticipated lower international trade this marketing year is a big reason for the slide in cotton prices. Reports noted that rain and fluctuating temperatures on the Texas South Plains have raised concerns about possible impacts on cotton quality. With most of the state still in some degree of drought, rain is good, but the timing could sure be better. USDA NASS reported yesterday that the nation’s cotton crop was in 48% good to excellent condition, down one percentage point from a week ago, while the area rated poor to very poor held steady at 18%. Eight percent of the acreage has been harvested, slightly behind normal. In Texas, cotton was rated 34% good to excellent, unchanged from last week, 26% was rated poor to very poor, a one point improvement. Harvest was 16% complete statewide, compared to 13% on average for this date.

Wheat prices were lower Monday. There was no fresh bullish news, so traders remained focused on the large world supplies. Weekly export inspections were a respectable 506,600 metric tons, but that’s down 24% from last week and 57% lower than a year ago, which did not help the market either. USDA NASS reported that U.S. winter wheat planting is 25% complete, somewhat ahead of the 22% average. In Texas, wheat seedings are 20% complete, compared to 25% on average. The same rains that are causing problems for farmers trying to harvest cotton should benefit the winter wheat crop.

Corn and grain sorghum prices were also lower as expanding harvest-time supplies pressured markets. There were also reports that the U.S. lost some export business due to China’s ongoing rejection of U.S. shipments because of contamination with unauthorized GMO varieties. However, weekly corn export inspections of 1.02 million metric tons were up 34% from last week and more than double a year ago. After markets closed, USDA reported that the U.S. corn crop remained in 74% good to excellent condition, unchanged from a week earlier. However, crop development is lagging, with 42% of the acreage mature, compared to 54% on average by this date, and only 7% of the crop has been harvested, less than half the average 15%. The Texas corn crop is 67% harvested, slightly ahead of the normal 65%, with the remaining acreage rated in 67% good to excellent condition.

Stock markets closed lower yesterday as “uncertainty about China's economic growth injected a note of caution into global financial markets.” Traders had hoped that China would take more aggressive steps to boost growth, but its Finance Minister said that was unlikely to happen. A measure of Chinese manufacturing activity for September will be released later today. Riskier tech and small company stocks posted the largest declines.

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.