Oct 15 2014

Texas Daily Ag Market Summary 10/15/14 Posted 9 years 204 days ago by

• Feeder cattle mostly steady to higher, few lower; futures lower.
• Fed cattle cash trade inactive; formula trades higher; futures lower.
• Choice beef prices higher; Select-grade lower.
• Cotton lower.
• Grains and soybeans higher.
• Crude oil and natural gas higher.
• Stock markets mostly modestly higher.

Texas feeder cattle auctions quoted prices mostly steady to $8 higher per cwt. One location was steady to $5 lower, but also noted that offerings were generally of lower quality than at the previous week’s sale. Feeder cattle futures were lower because of the higher grain futures and lower fed cattle futures. There was talk that the market might be reaching a top, but the tight feeder supplies are not going to ease any time soon and beef demand is holding up at historically-high levels. The fed cattle cash trade remained inactive yesterday with asking prices still at $166-$167. Formula trades were nearly 50 cents higher. Wholesale beef values were higher for Choice cuts, but lower for Select-grade offerings. Estimated cattle harvest totaled 228,000 head, 1K less than last week and 17K lower than a  year ago. Fed cattle futures were lower amid concerns that live cattle prices may be weakening. This week’s fed cattle cash trade has yet to develop and beef prices remain supportive, but market sentiment turned more cautious as traders worried that beef demand might falter. 

Cotton cash prices and futures were lower. The Cotton Advisory Board of India has estimated the Indian crop at a record 31.25 million bales, up less than 1% from last season and only 250,000 bales higher than USDA’s projection. Sharply lower equity markets were also a factor in the decline. Weather forecasts are calling for drier conditions and cool temperatures in the Cotton Belt. A light freeze was reported at Muleshoe early yesterday, but temperatures in the region are generally expected to bottom out in the low 40’s over the next week or so. Wet weather persisted in the Delta and Southeast, likely bringing their harvest to a halt for several days, but drier conditions are in the forecast there, too. USDA NASS reported that the U.S. cotton crop was 22% harvested, slightly behind the five-year average, with 47% of the remaining acreage rated in good to excellent condition, unchanged from last week. (Comparisons to last year are not available because of last year’s federal government shutdown.) In Texas, 20% of the cotton crop has been harvested, only one point behind the average, with 33% of the acreage rated good to excellent, one point better than a week ago

Wheat prices followed corn and soybeans higher. There was little fresh news for wheat, but the spillover from other grains was enough to overcome lingering concerns about the large world supplies and generally-favorable conditions in the U.S. U.S. winter wheat seedings were 68% complete, one point ahead of normal. The Texas crop is 63% planted, compared to 60% on average by this date. USDA has not yet started reporting wheat condition.

Corn and grain sorghum prices were higher due to concerns about harvest delays in the Corn Belt. Wet conditions are hampering the harvest of a late-maturing crop and that had traders worried about impacts on yields and quality. Most are still expecting a record-large corn crop, but maybe not as large as the current forecast. After markets closed USDA NASS reported that the U.S. corn harvest progressed to 24% complete, well behind the normal 43%. However, 87% of the crop is now rated mature, only slightly behind the 89% average, and 74% of the remaining acreage is rated in good to excellent condition, unchanged from a week ago. The Texas corn crop is 70% harvested compared to 82% on average by this date. The crop is rated in 67% good to excellent condition, unchanged from last week. For grain sorghum, 41% of the U.S. crop and 74% of the Texas acreage has been harvested.

Stock markets were mostly modestly higher, with only the Dow posting a small decline. However, most indexes again closed near session lows. A sharp drop in crude oil futures pulled energy stocks lower. Airline shares recovered somewhat from Monday’s drop, which was triggered by concerns that Ebola fears would cut into travel plans. Third quarter corporate earnings reports were mixed. JP Morgan Chase reported a profit, but failed to meet pre-report expectations. Citigroup beat expectations for both profits and revenue. Wells Fargo’s earnings met expectations. Johnson & Johnson stock declined even though its earnings rose 59% on higher pharmaceutical sales.

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.