Texas Daily Ag Market Summary 10/16/14

Posted 10 years 43 days ago by

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

Texas feeder cattle auctions quoted prices mostly steady to $7 higher per cwt, with one location steady to $5 lower on heifers. Feeder cattle futures were again lower, with most contract months down the $3 daily trading limit, mostly due to pressure from tumbling equity markets and concerns about how that would impact beef demand. The fed cattle cash trade was steady with last week at $164 on 2,100 head. Formula trades were nearly $1 higher. Wholesale boxed beef values were higher for Choice cuts, but lower for Select-grade offerings. Estimated cattle harvest so far this week totals 336,000 head, down 6K from last week and 33K lower than a year ago. Fed cattle futures were lower, under pressure from falling stock markets, cheaper corn futures and questions about beef demand.

Cotton cash prices and futures were lower, mostly due to the lower stock markets and falling oil prices. The lower oil prices are a problem since that reduces the cost of synthetic fibers, making them more competitive with cotton. Reports also noted that falling cotton prices have also triggered price support programs in India, Pakistan, West Africa and the U.S. Some are new and some are programs that laid dormant when cotton prices were higher. In the U.S., the USDA marketing loan program is back in play.

Wheat prices were higher. There are some ongoing concerns about dry weather in Australia, but the market remains under pressure from generally-favorable conditions in the U.S. and large world supplies.

Corn and grain sorghum prices were lower as traders are still expecting a record-large corn crop in spite of the late development of this year’s crop and recent harvest delays. Reports noted that ethanol prices are under pressure from falling crude oil, but that overall ethanol demand remains strong.

This week’s U.S. Drought Monitor (click here for the Texas map or here for the U.S. map and summary) showed another modest improvement in conditions in Texas with 69% of the state now in some degree of drought or abnormal dryness, down one percentage point from a week ago. That is the lowest percentage in drought for Texas since late November 2010. Nationally, the total acreage experiencing abnormal dryness or some degree of drought declined by three points to 44% percent of the contiguous states.

Stock markets closed lower again yesterday as investors worried about global growth and weaker than expected U.S. economic news. The Dow dropped more than 300 points at the open, partially recovered, dropped and partially recovered again to end the session 173 points (1%) lower. Some airline shares fell after news broke that the second Dallas Ebola patient had just returned from a trip to Cleveland. Bank of America stock declined after it reported much smaller profits that a year ago, but still beat expectations. In U.S. economic news, the Producer Price Index, retail and food service sales and business inventories all came in lower than expected. To top off the weak news, the New York Federal Reserve Bank manufacturing index fell sharply to a much lower than expected reading.

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.