Aug 05 2014

Texas Daily Ag Market Summary 8/5/14 Posted 9 years 259 days ago by

• Feeder cattle steady; futures higher.
• Fed cattle cash trade inactive; formula trades lower; futures higher; beef prices near unchanged.
• Cotton higher.
• Grains and soybeans higher.
• Crude oil and natural gas higher.
• Stock markets higher.

 

Texas feeder cattle auctions quoted prices mostly steady compared to a week ago. Yesterday, the Oklahoma City National Stockyards were $2-$5 higher on feeder steers, steady on feeder heifers and $6-$10 higher on calves. Feeder cattle futures were higher. Reports noted that buyers are starting to get nervous about feeder supplies this fall as many feel that much of this year’s inventory has either been sold already or forward-contracted. The fed cattle cash trade was inactive on Monday, with asking prices reportedly starting the week at $165, up $3. Confirmed formula trades, mostly from Friday, were about 75 cents lower per cwt (dressed basis). Wholesale boxed beef values were near unchanged, with Choice offerings slightly higher and Select-grade cuts slightly lower. Estimated cattle harvest on Monday was 113,000 head, up 5K from last week, but down 3K from a year ago. Fed cattle futures were higher.

Cotton cash prices and futures were higher yesterday mostly due to speculative buying of the underlying futures contract and stronger outside markets. Wire service reports said that “speculative shorts” (i.e., non-commercial traders who have sold futures contracts, betting prices will go down) hold their largest position in the futures market since 2009, when cotton was priced around 45 cents per pound. The recent buying was likely some of those traders buying back contracts to cover their short position. The International Cotton Advisory Committee’s monthly update, released last Friday, did not help cotton prices, showing higher projected world production and carryover stocks. USDA NASS reported that the national cotton condition rating slipped slightly lower, with 53% of the acreage now rated good to excellent, compared to 54% a week ago. The area in poor condition increased by a point. 68% of the acreage is setting bolls, higher than both last year and the 5-year average. In Texas, only 38% of the crop was rated in good to excellent condition, also down a point from last week, and another 40% was rated fair. The overall rating index was 64 points versus 58 points at this time last year. 57% of the acreage is setting bolls, slightly behind the average. USDA AMS said on Friday that harvest was getting started in the Lower Valley, South Texas and the Upper Coast.

Wheat prices were higher on Monday amid expectations that export demand will improved because of quality issues in Europe and tensions in the Black Sea Region. However, weekly export inspections reported yesterday were not supportive, down 11% from last week and less than half of a year ago. USDA NASS reported that winter wheat harvest is at 90% complete, compared to 85% on average, and for spring wheat, 97% has headed, matching the five year average, with 70% rated good to excellent, unchanged on the week.

Corn and grain sorghum followed wheat and soybeans higher. Export inspections also supported the market, with corn shipments up 40% from last week and 3 times higher than a year ago. Grain sorghum inspections, which generally fluctuate more than corn because volumes are smaller, were down 32% from last week, but 3 times higher than a year ago. There are growing concerns about dry conditions in parts of the Corn Belt, but forecasts are calling for a little rain in the region. Corn condition ratings slipped a little, with 73% of the acreage rated in good to excellent condition, down 2 points from a week ago, but still much better than the 64% at this time last year. 90% of the acreage has silked, up 2 points from the average. In Texas, 63% of the corn crop was rated in good to excellent condition, up 2 points from a week ago. The crop scored an overall condition index of 79 points, up 3 from this time last year. 45% of the corn acreage is mature, down from 54% both last year and on average. Both U.S. and Texas grain sorghum were rated in mostly good to fair condition, with 39% of the Texas crop harvested, lower than the 45%, both at this time last year and on average.

Stock markets closed higher yesterday after a “decent” quarterly report from Warren Buffett’s Berkshire Hathaway and the announcement of a “rescue package” for a struggling Portuguese bank.

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.