Aug 01 2014

Texas Daily Ag Market Summary 8/1/14 Posted 9 years 263 days ago by

• Feeder cattle mostly $2-$10 higher; futures lower.
• Fed cattle cash trade inactive; formula trades $11 higher; futures lower; Choice beef prices higher, Select lower.
• Cotton lower.
• Corn, grain sorghum lower; wheat, soybeans higher.
• Crude oil lower; natural gas higher.
• Stock markets lower.

 

Texas feeder cattle auctions quoted prices mostly $2-$10 higher per cwt, with a few locations steady with last week on at least a portion of their offerings. Feeder cattle futures followed fed cattle lower. The fed cattle cash trade remained inactive across all major U.S. cattle feeding regions Texas yesterday, but Texas formula trades were up a substantial $11 per cwt. Wholesale boxed beef values were modestly higher for Choice offerings, but modestly lower for Select-grade cuts. Estimated cattle harvest through Thursday totaled 451,000 head, down 7K from last week and 33K lower than a year ago. Fed cattle futures were lower mostly due to weak outside markets (equities) and speculative profit-taking on the last trading day of July. One observer remarked yesterday, “One little recognized and rarely mentioned item supporting beef demand is the weather. Cooler than normal weather patterns have covered the eastern two thirds of the country. Cooler weather supports more cookouts and beef is frequently the center of the plate.”

Beef exports for the week totaled 17,300 metric tons (MT), up 60% from both the previous week and the prior four-week average. Japan, South Korea and Canada were the top buyers. Export shipments of 14,400 MT were down 1% from the previous week, but up 4% from the average. The leading destinations were Japan, Mexico and South Korea.

Cotton cash prices and futures were lower, mostly because of the decline in the stock markets, though expectations for a large U.S. crop and large world cotton inventories continue to put steady pressure on the market. Export data were somewhat supportive. Cotton export sales for the old-crop 2013/14 marketing year totaled 5,700 bales, much higher than last week’s negative 1,900 bales, but one-fifth the prior four-week average. Malaysia, Turkey and Mexico were the primary buyers. New crop sales for the 2014/15 marketing year of 254,400 bales were down 32% from a week earlier, but up 4% from the average. China, Pakistan and Vietnam were the leading buyers. Shipments totaling 118,400 bales were up 64% from the previous week, 3% higher than the average and higher than the weekly average needed to meet USDA projections for the marketing year. Mexico, Indonesia and China were the top destinations.

Wheat prices were higher as recently-lower values have encouraged end-user purchases. Export sales were also supportive, but shipments were a little disappointing. Traders are also keeping an eye on the situation in the Black Sea regions. The impacts of the Russian sanctions on wheat exports are unknown at this point, but most traders think it will help business for other exporters, including the U.S. Wheat export sales totaled 801,000 MT, up 81% from the previous week and 92% higher than the prior four-week average. The primary buyers were Nigeria, Panama and Brazil. Shipments of 419,600 MT were down 24% from a week earlier and down 1% from the average. Mexico, Japan and Taiwan were the top destinations.

Corn and grain sorghum prices were lower, also under pressure from falling outside markets and expectations for a large crop. One wire service report noted, “Weather generally looks good for most of the Midwest. Some rain would help, but we’re getting close to the crop effectively being made.” Export data were disappointing. Corn old-crop export sales of 173,800 MT were down 40% from the previous week and 54% below the prior four-week average. South Korea, Saudi Arabia and Mexico were the leading buyers. New crop sales totaled 1,093,200 MT, down 4% from last week, but up 75% from the average. Mexico, unknown destinations and Columbia were the primary buyers. Exports of 865,500 MT were down 13% from a week earlier and 14% below the average. The top destinations were Japan, Mexico and South Korea. Unless volumes pick up, it may be difficult to reach the USDA projections for the marketing year that ends August 31.

Stock markets closed solidly lower with most of the major indexes down by about 2% and sometimes more. The Russian sanctions, worries about higher interest rates at some point in the future. Wire services also said that second quarter corporate earnings reports have “been generally  positive, but a series of lackluster reports weighted on the market Thursday.” On the plus side, the Labor Department reported that new unemployment claims last week totaled 302,000, up from last week, but better than expected.

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.