Texas Daily Ag Market Summary 11/20/14

Posted 10 years 7 days ago by

Feeder cattle mostly steady to $5 higher, few $5-$10 higher; futures lower.
Fed cattle cash trade inactive; formula trades higher; futures lower; beef prices higher.
Cotton cash prices unchanged; futures lower.
Grains and soybeans higher.
Crude oil and natural gas higher.
Stock markets higher.

Texas feeder cattle auctions quoted prices mostly steady to $5 higher, with a couple of locations $5-$10 higher on a portion of their offerings. Feeder cattle futures were lower in response to higher corn futures. The fed cattle cash trade remained inactive on Thursday with no change in asking prices or bids. There may not be much movement until after USDA releases its monthly Cattle on Feed report this afternoon. Formula trades were nearly $2 higher. Wholesale boxed beef values were higher and have been stable to higher over the past week. That’s a good sign that beef demand is holding its own. Estimated cattle harvest through Thursday totaled 442,000 head, up 7K from last week, but 33K below a year ago. Fed cattle futures were lower. Beef export sales for the week totaled 13,500 metric tons (MT), up 69% from the previous week and up 26% from the prior four-week average. The primary buyers were Hong Kong, Canada and South Korea. Export shipments of 12,900 MT were up 3% from a week earlier, but down 4% from the average. Japan, Hong Kong and South Korea were the leading destinations.

Cotton prices cash prices were unchanged, but futures were lower as large world supplies continue to burden the market. As one analysis noted, current cotton inventories outside China represent seven months of usage and the figure balloons even larger if you factor in China. The fundamental picture won’t change much until supplies get tighter – and most measures don’t consider supplies to be tight until they get below three months of usage. Export data were mixed, with stronger sales, but weak shipments. Cotton export sales totaled 172,000 bales, up 9% from the previous week and 41% higher than the prior four-week average. The top buyers were China, Turkey and Indonesia. Export shipments of 62,600 were the lowest of the marketing year, down 29% from a week ago and 22% lower than the average. The primary destinations were Mexico, Turkey and China.

Corn and grain sorghum prices were solidly higher as buying interest picked up following recent prices declines. Corn data were mixed, as well. Sales came in better than expected, but shipments were disappointing. Corn export sales totaled 908,700 MT, up 80% from the previous week and 45% higher than the average. The leading buyers were Japan, Mexico and Peru. Export shipments of 386,900 MT were the lowest of the marketing year, down 36% from a week earlier and down 39% from the prior four-week average. Japan, Mexico and Columbia were the top destinations.

Wheat prices followed row crops higher, with an added boost from concerns that cold temperatures on the Plains would damage the emerging crop. Tensions in Ukraine contributed to the rise, but large supplies and slack demand were still pressuring the market. Export data were bearish. Wheat export sales totaled 361,700 MT, down 13% from the previous week, but up 1% from the prior four-week average. The primary buyers were unknown destinations, Mexico and Peru. Exports of 178,400 MT were down 43% from a week earlier and 39% lower than the average. The Philippines, Israel and Ecuador were the leading destinations.

Stock markets closed modestly higher as higher crude oil prices boosted energy stocks. In addition, existing home sales increased more than expected and several companies reported better-than-expected quarterly results, including Best Buy, Williams-Sonoma and Dollar Tree. The Philadelphia Federal Reserve manufacturing index also jumped much higher, compared to expectations for a decline and the Conference Board’s Index of Leading Economic Indicators increased more than expected. On the down side, weekly unemployment claims declined, but were still higher than pre-report expectations. The Labor Department reported that the Consumer Price Index for October was flat, compared to expectations for a 0.1% increase. Core inflation, which excludes food and fuel, heated up a little, with prices up 0.2% in October, compared to pre-report expectations for a 0.1% increase.

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.