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Jun
27
2014

Texas Daily Ag Market Summary 6/27/14

Posted 9 years 277 days ago by

  • Feeder cattle steady to $12 higher; futures higher.
  • Fed cattle cash trade inactive; futures higher; Choice beef prices higher, Select lower.
  • Cotton lower.
  • Grains and soybeans higher.
  • Crude oil and natural gas lower.
  • Stock markets modestly lower.

 

Feeder cattle prices reported by Texas auctions were steady to as much as $12 higher per cwt and feeder cattle futures were up the daily trading limit as limited supplies and strong demand continue to support the market. Reports note that there is considerable competition for good stocker-type cattle to put out on revived pastures. The fed cattle cash trade remained quiet yesterday across all major U.S. cattle feeding areas. Wholesale boxed beef values were higher for Choice offerings, but modestly lower for Select-grade cuts. Estimated cattle harvest through Thursday totaled 463,000 head, down 1K from last week and 21K lower than a year ago. Fed cattle futures were higher. Beef export sales of 17,100 metric tons (MT) were up 6% from the previous week and up 31% from the prior four-week average. Hong Kong, South Korea and Mexico were the leading buyers. Export shipments totaled 15,500 MT, up 7% from a week earlier and 8% higher than the average. Japan, South Korea and Mexico were the top destinations.

Reports reminded ranchers and farmers that “USDA’s Risk Management Agency offers the Pasture Rangeland Forage Insurance program as a risk-management tool to provide income to help offset the loss of forage production due to drought. The trouble is, many ranchers and farmers are likely unaware of the program. The PRF program provides coverage for annual forage crops in Texas, Oklahoma, Kansas, Nebraska, South Dakota and North Dakota. It covers annual crops planted for forage or fodder used for grazing, haying, green chop and silage.” Click here for more information from USDA RMA.

Cotton cash prices and futures were lower again yesterday following a disappointing weekly export report and positioning ahead of Monday’s USDA NASS Acreage report. Sales were lower than expected, but not a total surprise due to the tight supplies of uncommitted cotton. Cotton export sales totaled only 3,600 bales for the 2013/14 old-crop year, compared to 153,100 last week and a four week average of 96,600 bales. Indonesia, China and Morocco were the primary buyers. New crop cotton sales of 24,100 bales were also down sharply, 77% lower than the previous week and 79% below the average. China, Mexico and Turkey were the primary buyers. Exports of 126,400 bales were up 6% from a week earlier, but down 28% from the average and lower than the weekly average needed to meet USDA projections for the marketing year.

Wheat prices were higher yesterday as traders continued to adjust positions ahead of Monday’s USDA reports. Most expect June wheat stocks to come in lower than a year ago and a slight downward adjustment in acres compared to the March planting intentions report. Harvest delays and quality concerns remain factors in the market, but large world supplies and competition from lower-cost exporters continue to pressure prices. Export data were mixed. Wheat export sales of 359,400 MT were down 4% from the previous week, with South Korea, Brazil and the Philippines the primary buyers. Exports totaling 587,000 MT were up 12% from last week. Japan, Indonesia and Brazil were the top destinations.

Corn and grain sorghum prices followed soybeans higher. Traders are also keeping an eye on flooding and forecasts for more rain in parts of the Corn Belt and export data were mostly supportive. Corn export sales totaling 321,400 MT for the 2013/14 marketing year were three times higher than the previous week, but down 22% from the average. Japan, South Korea and Vietnam were the primary buyers. Sales of new-crop corn for the 2014/15 marketing year totaling 232,100 MT were three times higher than the previous week and three times higher than the average. Mexico, Unknown Destinations and Costa Rica were the leading buyers. Exports of 1,154,500 were up 3% from the previous week and 2% above the average. The top primary destinations were Mexico, Japan and South Korea.

Stock markets closed modestly lower yesterday after the president of the St. Louis Federal Reserve Bank said “the central bank should be well-positioned to start hiking rates by the first quarter of 2015.” The Labor Department reported that first time unemployment claims fell last week, but were still higher than expected. The Commerce Department said that consumer spending rose in May, but by less than expected, while a 0.4% increase in personal income met expectations.

The Congressional Budget Office (CBO) said in a report yesterday (click here) that “Gasoline’s price will increase up to 9 percent, and diesel fuel will rise by up to 14 percent by 2017 because of the Renewable Fuel Standard (RFS) if Congress does not repeal it. In order to comply with the increasing mandates called for under the Energy Independence and Security Act, fuel refiners would have to more than triple their use of advanced biofuels by 2017, and would have to use much more ethanol in gasoline than the 10 percent blend that older vehicles can tolerate.”


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.


 






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