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Mar
03
2014

TDA Daily Market Summary 3/3/2014

Posted 4 years 226 days ago ago by Texas Department of Agriculture

  • Feeder cattle steady to $10 higher; futures lower.
  • Fed cattle cash trade inactive; futures higher; beef prices higher.
  • Cotton lower.
  • Grains and soybeans higher, except rice futures lower.
  • Crude oil and natural gas higher.
  • Stock markets mostly higher.

 

Texas auctions reported feeder cattle prices were steady to as much as $10 higher and Texas direct feeder cattle sales were mostly steady. Market fundamentals remain very supportive for feeder cattle prices, with record high fed cattle prices at mid-week pretty much erasing any weakness in the market. However, feeder cattle futures were lower in response to higher corn futures. The fed cattle cash trade was quiet on Friday after pushing to a new all-time high on Wednesday of $150 per cwt, up $5.31 from the previous week’s average. Wholesale boxed beef values were sharply higher for both Choice and Select-grade offerings. Estimated weekly cattle slaughter was higher than both last week and a year ago, when a massive snowstorm shut down plants in the Midwest. Fed cattle futures were higher as the February contract expired on Friday.

Cotton cash prices and futures were lower on rumors that China will lower the price on cotton it is selling out of its reserves and maybe offer its domestic yarn mills a deal that would give them one ton of import quota for every four tons of cotton they buy from reserves. China is sitting on enough cotton to meet its domestic needs for 19 months so prices fall on any suggestion that those reserves will be unleashed on the market. On the plus side, the Chinese Cotton Association reaffirmed its earlier forecast for a 9% drop in Chinese cotton acreage this year.

Wheat prices were higher mostly because of forecasts for more cold weather on the U.S. Plains that could cause more freeze damage and turmoil in Ukraine that could increase the possibility of U.S. exports. Agricultural transportation backlogs in Canada added to the gains. Railroads have concentrated on transporting oil and petroleum products as colder weather has increased demand for fuels to heat homes and power electricity generators. That has stalled the movement of ag products. According to news wire reports, “Canada’s Ag Minister Gerry Ritz is warning railroads that the current backlog of agricultural commodities needs to be cleared or the companies could face increased regulation or even new laws to prevent that from happening again.”

Corn and grain sorghum prices followed wheat and soybeans higher. The potential for increased exports due to the situation in Ukraine was also bullish.

Stock markets closed mostly higher on Friday with only the Nasdaq index posting a modest decline. Stocks were much higher early in the session, but then tumbled on news that Russia sent troops into the Crimea region of Ukraine. U.S. economic news was mixed. A leading consumer sentiment index came in higher than expected. A Midwest manufacturing index rose more than expected. The National Association of Realtors said that contracts to buy existing homes rose less than expected during January, with sales down 9% from last year. The Commerce Department said the economy grew by an annual rate of 2.4% during the fourth quarter of 2013, much lower than the preliminary reading of 3.2%.


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.