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Jun
05
2014

TDA Daily Ag Market Summary 6/5/14

Posted 4 years 75 days ago ago by Texas Department of Agriculture

  • Feeder cattle steady to $6 higher; futures higher.
  • Fed cattle cash trade inactive; futures mostly higher; Choice beef prices lower, Select higher.
  • Cotton lower.
  • Corn, grain sorghum, rice lower; wheat, soybeans higher.
  • Crude oil lower; natural gas higher.
  • Stock markets modestly higher.

 

Feeder cattle prices reported by Texas auctions were steady to $6 higher compared to the previous sale. The recent rains have boosted buying interest, but it will take much more to sustain pastures through the summer. Overall, limited supplies and strong demand continue to support the feeder cattle market. The fed cattle cash trade remained quiet across all major U.S. cattle feeding regions. Reports said feedlots passed up packer offers of $142 per cwt and are holding firm at $145. Estimated cattle slaughter through Wednesday totaled 348,000 head, well above last week’s holiday-reduced numbers, but still well below a year ago. Wholesale boxed beef values were lower for Choice offerings, but slightly higher for Select-grade cuts. Fed cattle futures were mostly higher, with only the spot-month June contract posting a decline.

Cotton cash prices and futures were lower as markets continue to adjust to the recent rains that boosted crop prospects across the Cotton Belt. There are some lingering concerns about planting delays caused by those same rains, but not enough to overcome bearish market fundamentals – large world supplies, the aforementioned prospects for a good U.S. crop and forecasts for smaller trade and higher world carryover from the 2014/15 crop.

Wheat prices were higher mostly due to speculative buying on the underlying futures contract. Large world supplies and sluggish demand continue to pressure the market and now the U.S. winter wheat harvest is getting underway, which will add to supplies. Traders are also keeping an eye on early yield reports. The next official estimates from USDA will be released next Wednesday.

Corn and grain sorghum prices were lower as conditions remain favorable for a large U.S. crop this year. There were some concerns yesterday about storm damage in parts of Nebraska, Iowa and Missouri. Hail and wind damage from thunderstorms are devastating for individual growers, but rarely enough to impact overall U.S. production.

This week’s U.S. Drought Monitor (click here for the Texas map or here for the U.S. map and summary) showed a decline in overall conditions in Texas, with 91% of the state rated in some degree of drought or abnormal dryness, up from 89% a week ago. However, the areas in the two worst categories, extreme and exceptional drought, dropped again this week to 27%, down from 33% last week. Nationally, conditions remained unchanged with 48 percent the contiguous states reported in some degree of abnormal dryness or drought.

Stock markets closed modestly higher yesterday following a pair of mostly-bearish economic reports. Payroll processor ADP estimated that the U.S. private sector added only 179,000 jobs during May, well below the 210,000 expected. The Commerce Department reported that the trade deficit grew more than expected during April.


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.