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Mar
25
2014

TDA Daily Agriculture Market Summary 3/25/14

Posted 4 years 145 days ago ago by Texas Department of Agriculture

 

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

 

Texas auctions reported feeder cattle prices mostly steady on Friday-Saturday. On Monday, the Oklahoma City National Stockyards were mostly $1-$6 higher per cwt, with 5-weight feeder steers setting a new record, averaging nearly $217 per cwt. However, feeder steers over 850 lbs. were steady to $1 lower. Several Texas sales also noted lower prices last week on heavier-weight offerings. Feeder cattle futures were higher in response to cattle on feed data last week showing heavy placements during January and February. The strong feeder market likely pulled forward marketings that normally would have occurred later this spring. Add to that higher heifer retention rates and the stage is set for very tight feeder supplies later in the year. The fed cattle cash trade was inactive yesterday, as it usually is early in the week. Reports have initial asking prices $2-$3 higher than last week’s average at $152-$153. Wholesale boxed beef values were higher yesterday. Estimated cattle slaughter on Monday was lower than last week, but higher than a year ago. Fed cattle futures were higher.

Cotton cash prices and futures were lower after China lowered by 4% the base price for sales out of its reserves. The move is designed to increase those sales as China moves away from a farm support program that relied on massive state purchases. China currently holds about 60% of the world’s cotton reserves, much of it lower quality fiber that its mills did not want to buy in the first place. In the past, they offered buyers additional import quota if they bought state-owned cotton, along the lines of buy four tons of domestic cotton and get one ton of import quota. They did not make that offer this time, meaning Chinese mills will likely be forced to buy domestic cotton in place of imports. Cotton planting is well underway in South Texas, with reports that about 20% of Lower Rio Grande Valley cotton is planted.

Wheat prices were higher, mostly due to speculative and fund buying of the underlying futures contracts. Traders are still concerned about the situation in Ukraine and the very dry conditions on the U.S. Southern Plains. Texas wheat condition ratings from USDA NASS showed another decline this week, with 55% of the crop now rated poor to very poor, compared to 52% last week. The Ukraine crisis still bothers traders, but it has not resulted in any significant increase in U.S. wheat exports. Reports out of Ukraine indicate that their exports are still running ahead of last year’s pace and yesterday Russia said it has exported 41% more grain that a year ago, nearly three-fourths of it wheat.  

Corn and grain sorghum followed wheat higher. The Ukraine-Russia conflict was also a factor and export inspections for the week came in higher than a week earlier and well above year-ago levels.  

Stock markets closed lower, with the tech-heavy Nasdaq index posting the largest drop. Lower bio-technology stocks led the decline amid concerns that the sector was overvalued. On the plus side, shares of Apple increased after reports that it was in talks with Comcast about a streaming service that would use Apple set-top boxes and give Apple content special treatment on Comcast cable. A report from bank HSBC said that its March index of Chinese manufacturing activity fell, compared to pre-report expectations for an 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.