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Nov
20
2014

Texas Daily Ag Market Summary 11/20/14

Posted 9 years 154 days ago by

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



Texas feeder cattle auctions quoted prices mostly steady to $5 higher, with a few $5-$10 higher on a portion of their offerings. Feeder cattle futures were again higher in response to the firm cash markets and lower corn futures. The fed cattle cash trade remained inactive, with no change in asking prices or packer bids. Formula trades were about 50 cents higher. Wholesale boxed beef values were higher. Estimated cattle harvest for the week totals 329,000 head, up 7K from last week, but down 24K from a year ago. Fed cattle futures were mixed with the nearby December contract unchanged and subsequent months ranging 65 cents higher to 40 cents lower. Reports noted a lack of clear direction for cattle futures since the cash trade has yet to develop for the week. There are ongoing concerns about how retailer demand will hold up once they’ve lined up supplies for holiday features. Reports note that packer margins are deeply negative, which naturally has them working to pull cattle prices lower. On the other hand, anything much lower would put feedlots in the red, too. As it stands now, Drovers/Cattle Network estimates show cattle owners are seeing a net return of only about $10 per head on current marketings and are looking at a loss of nearly $50 per head on cattle placed in feedlots this week for harvest in mid-April.

Cotton prices were lower after preliminary data showed Chinese cotton imports during October down 42% from a year ago to their lowest monthly level since January 2009. The report was not exactly a surprise since USDA has said for a while that Chinese imports will fall by 50% for the current marketing year. One analyst said the cotton market was like a tire with a slow leak that nobody can seem to find and fix.

Corn and grain sorghum prices followed soybeans lower. Harvest is winding down and there was little fresh crop-specific news for traders to digest so attention returned to the record-large corn crop forecast for this year and lower crude oil prices (which could impact corn usage for ethanol production).

Wheat prices followed other grain crops lower as large world supplies and weak demand continue to pressure the market. Reports that the U.S. imported wheat from France and the UK did not help.

This week’s U.S. Drought Monitor (click here for the Texas map or here for the U.S. map and summary) showed conditions in Texas near unchanged, with 69% of the state now in some degree of drought or abnormal dryness, down one percentage point from a week ago. 24% of the state remains in severe, extreme or exceptional drought, the same as last week. Nationally, Nationally, 47% of the country is experiencing abnormal dryness or some degree of drought, unchanged from a week ago.  

Stock markets closed slightly lower after the minutes from the last Federal Reserve minutes failed to provide any new information on when the central bank might start raising interest rates. In addition, the Commerce Department reported that housing starts fell 2.8% during October, compared to expectations for a .08% rise. However, building permits rose 4.8%, much more than the 0.6% increase expected. Both Lowe’s and Target reported quarterly results that beat expectations.


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.







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