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Mar
26
2014

TDA Daily Market Summary 3/26/14

Posted 4 years 63 days ago ago by Texas Department of Agriculture

  • Feeder cattle mostly steady to $4 higher, few $2 lower; futures higher.
  • Fed cattle cash trade steady; futures higher; beef prices higher for Choice, lower for Select.
  • Cotton sharply higher.
  • Grains lower; soybeans higher.
  • Crude oil lower; natural gas higher.
  • Stock markets higher.

 

Texas auctions reported feeder cattle prices mostly steady to $4 higher, though one location was steady to $2 lower on light-weight feeders. That bucks the trend we saw last week, when several locations reported higher prices on lighter cattle, which is what we normally see this time of year as stocker operators line up supplies to put back out on grass. Feeder cattle futures were higher in response to lower corn futures. Fed cattle cash prices in Texas were unchanged from last week’s $150 average in very light trade, about 600 head confirmed by USDA and 900 head reported by TCFA. Reports noted higher volumes sold in Kansas later in the day at prices $1-$2 higher per cwt. These early-week sales are unusual and suggest that at least one packer was caught short of inventory and needed to scramble to line up supplies. The TCFA daily volume and price summary also shows 72,300 head in formula sales, up from 64,700 last week. Wholesale boxed beef values were higher for Choice cuts, but lower for Select-grade offerings. Estimated cattle slaughter remains slightly smaller than at this time last week, but well above last year. Fed cattle futures were higher.

Cotton cash prices and futures were sharply higher after USDA ginnings data indicated that the 2013 crop was smaller than current estimates. The reports said U.S. gins processed 12.9 million bales of 2013 cotton, down 320,000 bales from USDA’s most recent crop production estimate reported in January and a little steeper drop than expected. USDA will likely work the lower ginnings numbers into its April supply and demand update. Domestic supplies are already fairly tight and a 300,000 bale reduction would result in carryover stocks equivalent to a 70-day supply of cotton “in a market where a 90-day supply is considered the threshold of tightness.” Final ginning and cotton production data will be published in May.

Grain prices were lower yesterday, mostly due to fund selling and speculative profit-taking on the underlying futures markets. For wheat, reports noted that traders are still watching closely the situation in Ukraine and weather conditions on the U.S. Plains. Crop condition ratings have declined across the Texas-Oklahoma-Kansas wheat belt due to high winds and dry soils. According to wire service reports, Ukraine’s Ag Ministry said that wheat sales for the current marketing year have totaled 7.66 million tons, 41% higher than at this time last year. Corn and grain sorghum were lower in spite of higher soybeans. Traders are still hopeful that the Ukraine crisis will boost U.S. export sales, but that has not happened yet. The market is also hesitant to make any big moves right now ahead of Monday’s USDA planting intentions report.

Stock markets closed higher yesterday, but well off session highs on mixed economic news. A home price index fell by 0.1% for January, matching expectations, but sale prices increased by 13% from the previous year. The Commerce Department reported that sales of new homes fell a little less than expected during February. The Conference Board’s consumer confidence index rose much more than expected. Meanwhile, a German business sentiment index declined for the first time in five months.


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.