TDA Daily Ag Market Summary 9/30/14

Posted 10 years 59 days ago by

Feeder cattle mostly steady, few higher; futures higher.
Fed cattle cash trade inactive; formula trades lower; futures higher; beef prices higher.
Cotton cash prices unchanged; futures lower.
Grains and soybeans higher.
Crude oil and natural gas higher.
Stock markets lower.

Texas feeder cattle auctions quoted prices mostly steady, with a few $5-$10 higher per cwt. Tight cattle supplies, especially for long-weaned yearling feeders, continue to support the market. Feeder cattle futures were higher. The fed cattle cash trade was inactive again yesterday after grinding to a halt last week. Cash sales normally account for a very small percentage of total fed cattle transactions, but last week USDA confirmed only a few head sold in Iowa with the volume too small to call a trend. No other region of the country, including Texas, recorded any sales under either the USDA mandatory or voluntary reporting systems. That’s the first time I can remember that happening under “normal” circumstances. Formula trades were about $3 lower yesterday on a dressed basis. Wholesale beef values were higher for both Choice and Select-grade offerings. Estimated cattle harvest for Monday totaled 115,000 head, down 1K from last week and 6K below a year ago. Fed cattle futures were higher.

Cotton cash prices were unchanged, but futures were modestly lower as markets continue to adjust to prospects for much lower exports to China. Other countries may take up some of the slack and China will still need to import cotton due to the lower quality of its holdings. Still, its imports will be down and, on top of that, India is predicting a much larger crop than current USDA projections show. Yesterday, after markets closed, USDA NASS reported that the Texas cotton crop was 17% harvested, somewhat higher than both last year and the 5-year average. Bolls are opening on another 50% of the acreage, well behind the normal. The Texas crop was rated in 33% good to excellent condition, down a point from last week. The U.S. cotton crop was only 10% harvested, compared to 7% at this time last year and 10% on average, as rain and cool weather has slowed crop development and harvest progress across the Cotton Belt. The crop was rated in 49% good to excellent condition, up a point from last week.

Wheat prices followed other grains higher. Final 2014 production numbers, along with Sept.1 stocks on hand, will be released later this morning by USDA NASS, with only minor changes expected from the August forecast. Weekly export inspections came in at a respectable 573,600 metric tons, up 10% from a week earlier, but down 36% from a year ago. USDA NASS reported that U.S. winter wheat seedings are 43% complete, well ahead of both last year (37%) and the average (36%). In Texas, winter wheat is 41% planted, compared to 40% at this time last year and 36% on average.

Corn and grain sorghum prices were higher yesterday in spite of mostly-bearish fundamentals. The advancing harvest is putting more new-crop grain on the market and a record-large corn crop is still expected. The next USDA production update is still a couple weeks in the future, but there have been many reports of better-than-expected yields across the Corn Belt. Corn export inspections totaling 601,800 metric tons were market-neutral, down 43% from last week, but up 8% from a year ago. USDA NASS reported the Texas corn crop 68% harvested, compared to 64% at this time last year and 69% on average. 76% of the remaining acreage is mature. The crop was rated in 67% good to excellent condition, unchanged from a week ago. The U.S. corn crop was 12% harvested, up from 11% last year, but well below the 23% average. Crop maturity is also lagging the average, indicating a larger-than-usual acreage is still vulnerable to an early frost. The crop was rated in 74% good to excellent condition, unchanged from last week. The Texas grain sorghum crop is 68% harvested, slightly ahead of normal, while the U.S. harvest was running somewhat behind normal at 32% complete.

Stock markets closed lower yesterday mostly due to international issues – protests in Hong Kong, ongoing tensions with Russia and a deepening conflict in the Middle East. U.S. economic news was mixed. The Commerce Department reported that personal spending rose 0.5% during August and personal income was up 0.3%, both meeting pre-report expectations. The National Association of Realtors reported that pending home sales fell 1% during August, compared to expectations for a 0.8% increase. The Dallas Federal Reserve Bank’s regional manufacturing index came in a little higher 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.