Agriculture Market Summary Jan. 31, 2012

For the week feeder cattle prices at the Texas locations covered by USDA Market News were mostly steady to $5 higher per hundredweight, with a few to $10 higher. Texas direct feeder sales were steady to $4 higher. Oklahoma City was mostly $2 to $4 higher on feeder cattle, steady to $4 lower on steer calves and $1 to $4, higher on heifer calves. Buyers continue to actively pursue the available cattle, with prices pushed higher on concerns that future supplies will be even tighter. Fed cattle cash prices were $2 lower in light trade after wholesale beef prices declined late in the week, further eroding packer margins. Feedlots are pushing for higher prices to help offset the increasing cost of feeder cattle while packers are trying to pull them lower to get their margins out of negative territory. Last week, the packers won the tug of war.

Cotton prices were lower following weak export sales during the Chinese New Year and little fresh news to support the market. Corn and grain sorghum were higher after another week of strong export sales and continued prospects for lower South American production. Wheat prices followed corn higher, but ample global supplies limited gains. As for futures markets, feeder cattle, fed cattle, wheat and corn were higher, while cotton and lumber were lower. The front-month feeder cattle contract hit new record highs every day last week amid prospects for tighter supplies.

Much of the state recorded rainfall during the week with the heaviest amounts east of a line from Wichita Falls to Abilene to San Antonio and north of I-10. Topsoil moisture was rated in short to very short supply in much of West and South Texas while the remainder of the state was mostly short to adequate. Some areas of surplus moisture were also noted, mostly in the Blacklands region and in East Texas. Winter wheat was 96 percent emerged and in mostly good to poor condition. Preparations for spring planting are underway in many areas. Pastures were rated in mostly poor to very poor condition, though recent rains and warm temperatures have helped winter grasses.

All cash prices above are market averages for locations covered by the USDA Market News program and do not reflect any particular sale at any specific location. Feeder cattle prices are for 500-600 pound medium and large No.1 steers at the Oklahoma City National Stockyards. Futures prices are quoted for the nearest month contract on the last trading day of the week. For additional information, contact TDA at (800) 835-5832 or visit our website, http://www.texasagriculture.gov/.