2014

Posted 10 years 61 days ago by

Feeder cattle steady to $5 higher; futures lower.
Fed cattle cash trade $2 higher; futures lower; beef prices lower.
Cotton higher.
Grains lower; soybeans higher.
Crude oil lower; natural gas higher.
Stock markets modestly lower.

Texas auctions reported feeder cattle prices steady to $5 higher per cwt compared to their previous sale as tight cattle supplies and active demand continue to support the market. Texas direct feeder cattle sales were $2-$4 higher than the previous week. Fed cattle futures were modestly lower in spite of lower corn futures. The fed cattle cash trade was $2 higher per cwt, averaging $144.13 per cwt on 2,200 head of confirmed sales. Wholesale beef prices were modestly lower on Friday. Cattle slaughter for the week is expected to total 539,000 head, the same as a week earlier, but still well below a year ago. For the year, cumulative cattle slaughter is running 8.5% lower than during the same period last year. Fed cattle futures were lower. Weekly beef export sales totaled 9,900 metric tons (MT), down 41 percent from the previous week and 19 percent from the prior four-week average. The leading buyers were Hong Kong, South Korea, Mexico and Canada. Shipments of 11,500 MT were down 4 percent from a week earlier and 5 percent from the average, with Japan, Mexico and Hong Kong the primary destinations.

Texas has been dethroned as the #1 cattle feeding state in the nation, at least for this month. USDA NASS released its monthly Cattle on Feed Report on Friday and the number of cattle in Texas feedlots declined by 7% compared to a year ago to 2.44 million head, 20,000 head fewer than in Nebraska. This is the first time since USDA began making cattle on feed estimates in 1965 that Texas has not been in the #1 spot. The change has been brewing for a while. Our ongoing drought, declining feeder cattle imports from Mexico, Nebraska’s access to cheaper feed supplies, and our loss of cattle processing capacity have all contributed to the shift. Nebraska’s cattle on feed inventory usually peaks this time of year and there is a good chance the #1 ranking will flip back and forth between the two states, at least for a while. As for total cattle numbers, Texas has been the #1 cattle state in the country for a long time and we will likely always be the #1 state. Our January 1 inventory of 11.3 million head was still nearly double #2 Nebraska’s 6.3 million, in spite of our loss of 2 million head since 2011 due to drought.

The U.S. inventory of cattle in feedlots with a capacity of 1,000+ head was 10.8 million head, down 3% from a year ago and on the low end of pre-report expectations. Placements in feedlots totaled 2.03 million head, up 9% from a year ago and much higher than the expected 3% increase. Marketings for slaughter were 1.79 million head, 5% below a year ago and equal to expectations. Texas fell to the

Cotton prices were higher on Friday in spite of mostly bearish news. In its first projections for the 2014/15 marketing year, USDA said that it expects U.S. and world cotton production to increase this year, adding to already-burdensome world supplies, resulting in a higher end-of-year carryover. U.S. average cotton prices for the marketing year are expected to decline from 76 cents per pound this year to 68 cents next year. Cotton export data were also disappointing. Sales for the week totaled 70,500 bales, down 41 percent from the previous week and 78 percent from the prior four-week average, but still higher than the weekly average needed to meet USDA projections for the year. The top buyers were Mexico, Turkey and Peru. Export shipments of 324,500 bales were down 4 percent from a week ago, but up 5 percent from the average and also higher than the average needed to meet USDA projections. Leading destinations were Turkey, China, Vietnam and Mexico.

Markets were 2-3 cents lower on corn and 5-6 cents lower on grain sorghum in response to bearish USDA projections for this marketing year and weaker exports. USDA projections for the 2014/15 marketing year indicate fewer acres planted to corn, but higher yields per acre, production slightly higher than in 2013 and higher carry-over stocks. The marketing year average corn price is also expected to drop from the $4.50 cents per bushel expected for the 2013/14 year to $3.90 the following year. Weekly corn export sales of 691,400 MT were down 46 percent from the previous week and down 50 percent from the four-week average. Japan, Peru and Egypt were the leading buyers. Shipments totaled 745,000 MT, down 22 percent from a week earlier and 15 percent from the average, with Japan, Mexico and Peru the top destinations.

Wheat prices were 8-9 cents lower per bushel as higher projected carryover stocks and bearish export data pressured the market. Wheat export sales for the week of 424,500 MT were down 29 percent from both the previous week and the prior four-week average. Japan, the Philippines and Uruguay were the leading buyers. Exports shipments were the lowest of the marketing year at 277,300 MT, down 31 percent from a week ago and 29 percent below the average. Brazil, Japan and South Korea were the leading destinations.

Stock markets were modestly lower on Friday as the flow of weak economic data continued. The National Association of Realtors reported that sales of existing homes fell 5.1% during January to their lowest pace since July 2012. As with other data last week, much of the decline was attributed to bad weather during January.

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.

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