Oct 20 2014

Texas Daily Ag Market Summary 10/20/14 Posted 9 years 183 days ago by

• Feeder cattle $6 higher to $10 lower; futures sharply lower.
• Fed cattle cash trade steady; formula trades $1 lower; futures lower.
• Choice beef prices higher; Select-grade lower.
• Cotton cash prices unchanged; futures mostly higher.
• Grains and soybeans mostly lower, except rice futures higher.
• Crude oil higher; natural gas lower.
• Stock markets solidly higher.

Texas feeder cattle auctions quoted prices $6 higher to $10 lower per cwt as the lower feeder cattle futures earlier in the week filtered down to many of the local markets. However, a couple locations noted stronger prices on at least a portion of their offerings. The past week’s tumbling feeder cattle futures pulled cash markets lower, but losses were limited by the tight supplies and strong demand from both feedlot operators and ranchers looking for cattle to turn out on fall/winter pastures. The fed cattle cash trade was inactive on Friday after settling at steady prices earlier in the week. Formula trades were $1 lower. Wholesale boxed beef values were near unchanged, with Choice offerings up a few cents and Select-grade cuts slightly lower. Estimated cattle harvest for the week totaled 565,000 head, up 3K from the previous week, but down 55K from a year ago. Year-to-date cumulative harvest is down 7.2%. Fed cattle futures were lower amid concerns about beef demand and generally mirrored the volatility seen in the equity markets. Beef export sales for the week totaled 8,000 metric tons (MT), down 43% from the previous week and 41% lower than the prior four-week average. Japan, South Korea and Hong Kong were the top buyers. Export shipments of 14,400 MT were up 3% from both the previous week and the average. Japan, Hong Kong and South Korea were the leading destinations.

Cotton cash prices were unchanged and futures were mostly higher, with only the nearby Dec contract posting a modest posting a decline.  Export data were disappointing. Cotton export sales totaled only 7,000 bales, down 90% from the previous week and down 95% from the prior four-week average. Taiwan, Turkey and Thailand were the primary buyers, while China cancelled 14,800 bales worth of prior purchases. Exports of 65,900 bales were the lowest of the marketing year, down 19% from the previous week, 25% below the average and the lowest weekly total since November 2013. Mexico, Turkey and Indonesia were the top destinations.

Wheat prices were lower on Friday. Concerns about planting delays in some areas if the Midwest and dry conditions in Australia were more than offset by pressure from large global supplies and lackluster demand. Export data were mixed. Wheat export sales totaled 454,000 MT, up 22% from the previous week and unchanged from the prior four-week average. Nigeria, Yemen and Japan were the leading buyers. Export shipments of 485,300 MT were down 27% from a week earlier and 21% below the average. Brazil, Nigeria and Yemen were the primary destinations.

Corn and grain sorghum prices were lower as prospects for a record-large corn crop continued to weigh on the market. There are ongoing concerns about getting the late-maturing crop out of the fields, with persistent harvest delays, especially in the eastern Corn Belt. Corn export sales totaled 1,922,800 MT, the highest of the marketing year, more than double both the previous week and the prior four-week average and the highest weekly total in more than four years. Mexico accounted for 56% of the total. An additional 510,500 MT were purchased for delivery from the 2015/16 crop, all by Mexico. Export shipments of 901,700 MT were down 8% from the previous week, but 7% higher than the average. Japan, Columbia and Mexico were the top destinations.

Stock markets were higher as buying interest picked up following the sharp declines earlier in the week. The higher trend started in Europe after the Bank of England said it would keep interest rates lower for a longer period and the European Central Bank said that will soon add to its stimulus measures. In the U.S., the Commerce Department reported higher than expected housing starts during September and a consumer sentiment index came in better than anticipated.

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.