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Aug
29
2014

Texas Daily Ag Market Summary 8/29/14

Posted 9 years 213 days ago by

  • Feeder cattle mostly steady, few $2-$15 higher; futures higher.
  • Fed cattle cash trade inactive; formula trades lower; futures higher; beef prices lower.
  • Grains and soybeans mostly higher.
  • Crude oil and natural gas higher.
  • Stock markets lower.

 

Texas feeder cattle auctions quoted prices mostly steady, with a few locations $2-$15 higher. Feeder cattle futures were higher. The fed cattle cash trade was inactive through though mid-day Thursday amid reports that feedlot managers held firm on their $156 asking price and quickly refused packer bids of $153, compared to last week’s $152 average. Wholesale boxed beef values were lower. Estimated cattle harvest through Thursday totaled 460,000 head, up 6K from last week, but down 29K from a year ago. Fed cattle futures were higher. The lower beef values will keep a lid on the potential gains in cash cattle markets as packers resist any erosion of their margins and that will continue to pressure local feeder markets as well. The higher futures prices are a good sign, though, and will give sellers an additional bargaining chip. On the supply side, cattle numbers remain very tight and that will keep a floor under the market at historically-high levels. Beef export sales for the week of 10,600 metric tons (MT) were up 47% from the previous week, but down 7% from the prior four-week average. Mexico, Hong Kong and South Korea were the primary buyers. Export shipments totaled 14,000 MT, up 4% from the previous week, but down 2% from the average, with Japan, Hong Kong and South Korea the leading destinations.

Cotton cash prices and futures were lower yesterday after China set their cotton target price for domestic producers at $1.29 per pound, about double the current U.S. price. That’s high enough to maintain their large cotton acreage and almost guarantees that world cotton markets will remain saturated, especially with our large expected production. I guess they did not want India to pass them by as the world’s largest cotton producer. Export data were supportive. Cotton export sales totaled 247,700 bales, up 59% from the previous week, with China, South Korea and Turkey the top buyers. Shipments of 96,700 MT were down 8% from a week earlier and 17% below the average. The primary destinations were Turkey, China and Vietnam. Export commitments, outstanding sales plus shipments, reached 48% of the USDA export forecast, compared to 37% at this time last year.

Wheat prices were higher, mostly due to heightened tensions in Ukraine. Export data were neutral, with good sales, but slow shipments. Wheat export sales totaled 403,600 MT, up 94% from the previous week, but down 17% from the prior four-week average. Brazil, Nigeria and Japan were the leading buyers. Shipments of 466,700 MT were down 12% from the previous week, but unchanged from the average. The Philippines, Mexico and Taiwan were the primary destinations.

Corn and grain sorghum prices followed wheat and soybeans higher. There were some concerns about “excessive rains in parts of the Midwest,” but on their own, corn/grain sorghum fundamentals remain bearish, with a large crop expected and lackluster demand. Export data did not help. Corn export sales for the current 2013/2014 marketing year were a net negative 32,700 MT as cancellations outweighed new purchases. Sales for the upcoming 2014/2015 marketing year totaled 695,600 MT, down 3% from last week and 17% below the prior four-week average. Columbia, South Korea and Costa Rica were the leading buyers. Export shipments of 1,002,700 MT were down 10% from the previous week, but up 6% from the average, with Japan, Mexico and South Korea the primary destinations.

Stock markets closed lower yesterday “as renewed tensions on the Ukraine-Russia border overrode any enthusiasm for upbeat economic reports.” Ukraine said that Russian forces captured a coastal city near the border, while Russia denied it had any troops in Ukraine. On a more positive note, revised second quarter GDP came in higher than the initial reading, weekly unemployment claims dropped more than expected and pending home sales in July beat expectations.


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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