Posts Tagged ‘Texas’
Hay Crops Wither to Below Year 1909 Level
The severe drought in Texas, US, is bringing the hay crops to the lowest level in more than a century, pushing the feed prices for the dairy and beef producers up. Texas produces not only cattle but is also the biggest growing region for hay, which is used as the cattle feedstock across the whole country.
Price of some varieties of hay rose more than 50 percent during the last 12 months. The ongoing worst ever recorded drought destroys the grass and forces farmers to opt for more expensive cattle feed — mainly corn.
It’s estimated that this year, only one crop of hay will be collected compared to three crops harvested during normal years. The farmers are expected to harvest 57,605 million acres of hay this year — the lowest level since 1909. The corn is currently sown on 92,282 million acres — the highest post World War II level.
Corn futures is currently trading at $676.25 per bushel on CME as of 15:18 GMT today — up 0.26 percent during the day.
Will U.S. Cotton Production Exceed Forecast? Decline of Gold & Copper
U.S. cotton production may exceed the government’s forecast. Forecast in August predicts that farmers will harvest 13.5 million bales, compared to a July forecast of 13.25 million. July provided above-normal temperature and moisture enough to make favorable conditions for crop in Texas and southeastern states. December futures for cotton delivery gained $0.0157 (2.6 percent) to $0.6243 per pound on ICE Futures U.S. in New York on August 7th.
Gold falls as dollar increases and equities decrease today. Some weakness in the stock markets and dollar rebound causes demand for gold as alternative investment to decrease making some investors to sell gold. But there is speculation that some investors may buy gold after prices would fall as hedge against future dollar slide. December futures for gold fell $12.60 (1.3 percent) to $946.90 per ounce by 12:41 on the New York Mercantile Exchange’s Comex division.
Copper decline erased previous gains because of concerns that metal’s rally was exaggerated. Worldwide decline in demand for the metal threatens rally. As Goldman Sachs JBWere said, base-metals prices have run faster than justifiable. China is exception as its economic growth almost doubled copper prices. September futures for copper delivery slid $0.015 (0.6 percent) to $2.7705 per pound on NYMEX.
Will Texas Be Relieved from Drought? Pork Glut; New Price Mechanism of BHP
Texas may be relieved from drought by El Nino. The worst drought in Texas for 90 years causing concerns for crop harvest may be ended by the return of an El Nino climate pattern to the Pacific Ocean, characterized by warming waters. Damage to orange groves in Florida by hurricanes can also be reduced. The concern for harvest of U.S. crops caused cotton to gain a 10-month high on July 21 on ICE Futures U.S. in New York, while prices for orange-juice have increased 39 percent this year.
Hogs decline as heavy animals may cause glut. Hog producers are trying to make money by overfeeding hogs and this cause concern about a pork glut leading to drop in hog futures. October futures for hog dropped $0.0055 (1 percent) to $0.5215 per pound by 9:48 on the Chicago Mercantile Exchange.
The world’s largest mining company, BHP Billiton Ltd., agreed to sell 30 percent of its iron ore under new pricing system putting an end for tradition of settling annual contracts in Asia. The ore will be sold through a mix of cash, quarterly and indexed pricing. BHP dropped 1.6 percent to $37.43 as of the 16:10 Sydney time close on the Australian stock exchange.
