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Apr
03
2014

TDA Daily Agricultural Market Summary, 4/3/14

Posted 4 years 136 days ago ago by Texas Department of Agriculture

  • Feeder cattle steady to $3 higher; futures higher.
  • Fed cattle cash trade inactive; futures mostly higher; beef prices higher.
  • Cotton lower.
  • Grains and soybeans lower.
  • Crude oil lower; natural gas higher.
  • Stock markets modestly higher.

 

Texas auctions reported feeder cattle prices steady to $3 higher as buyers continue to compete for a limited supply of available cattle. Feeder cattle futures were higher in response to lower corn futures. The fed cattle cash trade remained inactive through Wednesday, with asking prices still around $153, but no word yet on packer bids. There were comments that packers were hoping that weaker live cattle futures and slumping beef prices might prompt feedlots to accept lower bids, but that has not happened yet. Higher wholesale boxed beef values yesterday strengthened the feedlots’ position. Estimated cattle slaughter for the week is running behind a week ago, but ahead of last year’s pace. Fed cattle futures were mostly higher, with only the nearby April contract posting a modest decline.

Cotton cash prices and futures were lower yesterday after the International Cotton Advisory Committee said that, “Uncertainty on how China will handle its large reserves next season and a significant gap between polyester and cotton prices doesn’t bode well for cotton consumption in China and, by extension, countries that have heavily exported cotton to China in recent seasons.” Ongoing concerns about drought conditions on the Texas Plains continued to provide some prices support. Timely rains could provide enough moisture to get cotton planted, but there may not be enough to produce a crop.

Grain prices were lower across the board. Wheat prices were lower after reports of beneficial rains on parts of the U.S. Plains – rain that largely missed Texas. Traders are still watching events in the Black Sea region, but it does not look like tensions in Ukraine will have much impact on U.S. exports or Ukrainian output. The Ag Ministry reported yesterday that 86% of their spring wheat crop is planted, well ahead of last year’s pace.

Corn and grain sorghum prices were also lower on reports of beneficial rains in some growing areas. Ample current supplies are also keeping a lid on old-crop corn prices. In addition, reports yesterday noted that even with the 4% decline in acres indicated by USDA’s “Prospective Plantings” report, normal tend-line harvested acres and yields would still result in the second largest corn crop on record. However, any threat to the crop could send prices surging higher. Ethanol data were supportive, with weekly production up from last week and the highest so far this year.

USDA yesterday declared another 11 North and North-Central Texas counties natural disaster areas due to drought. All but two Texas counties west of the I-35/I-37 corridor have been declared natural disaster areas, making them eligible for USDA assistance. Click here to view the map.

Stock markets closed modestly higher yesterday, with the Dow posting a new all-time high after private payroll processor ADP reported that the private sector added 191,000 jobs during March, very near pre-report expectations. The official Labor Department employment report will be released Friday. The Commerce Department reported that factory orders more than expected during February. Traders also responded positively to remarks by the Atlanta Federal Reserve Bank president that tapering of Fed asset purchases is going well and that the unemployment rate will not be the only factor used to determine future policies.

This week’s U.S. Drought Monitor (click here for the Texas map or here for the U.S. map and summary) showed little change in overall conditions in Texas, with the area of the state rated as abnormally dry or in drought, down less than a percentage point at 85 percent. However, there was a shift to the more-severe drought categories as areas rated in extreme and exceptional drought increased, but other categories declined. Parts of West, South and Southeast Texas remain drought-free and the state as a whole is in better shape than at this time last year, when 99 percent was rated in some degree of drought. Nationally, conditions worsened slightly, with 53% of the contiguous states reported in some degree of abnormal dryness or drought, up one percent from a week ago.


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.