Equity and futures markets were closed Friday in observance of Independence Day.
Negotiated cash fed cattle trade ranged from active on good demand in Kansas to light on moderate demand in the North through Thursday afternoon, according to the Agricultural Marketing Service.
For the week, FOB live prices were $3 lower in Kansas at $255/cwt., $3-$4 lower in Nebraska at $255-$256 and $4-$5 lower in the western Corn Belt at $255-$256. Dressed delivered prices were mainly $5 lower at $403. The previous week, FOB live prices in the Texas Panhandle were $258.
Choice boxed beef cutout value was $4.19 lower Thursday afternoon at $387.07/cwt. Select was $2.26 lower at $367.43. Week to week on Thursday, Choice was $6.55 lower and Select was $7.31 lower. Choice was about $10 lower over the past two weeks.
Cattle futures closed lower Thursday with weaker negotiated cash fed cattle prices and softer wholesale beef values.
Live Cattle futures closed an average of $2.24 lower and Feeder Cattle futures down an average of $3.43.
Week to week on Thursday, Live Cattle futures closed an average of $5.75 lower and Feeder Cattle futures were an average of $12.15 lower.
Grain and Soybean futures closed mixed Thursday with profit taking ahead of the holiday weekend.
Corn futures closed mostly 1¢ to 2¢ lower, except for fractionally higher to 2¢ higher in the front two contracts. Soybean futures closed 1¢ to 3¢ lower, except for fractionally higher to 5¢ higher in the front three contracts. Kansas City HRW Wheat futures closed 1¢ to 3¢ higher.
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Major U.S. financial indices closed mixed on Thursday. Tech stocks tied to chips applied pressure. On the other hand, a more bearish jobs report than expected provided support with investors thinking it might keep the Fed from raising interest rates.
Non-farm payroll employment grew by 57,000 month to month and the unemployment rate was little changed at 4.2%, according to the U.S. Bureau of Labor Statistics.Average hourly earnings for all employees on private nonfarm payrolls rose by 13¢ in June to $37.64. Over the year, average hourly earnings have increased by 3.5%.
The Dow Jones Industrial Average closed 594 points higher. The S&P 500 closed fractionally higher. The NASDAQ was down 207 points.
West Texas Intermediate Crude Oil futures (CME) were 11¢ to 26¢ higher through the front six contracts.
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Calf and feeder cattle price trends were hard to come by during the holiday-shorted week with many auctions closed. However, the CME Feeder Cattle Index was $10.61 lower week to week on Thursday at $371.25/cwt.
Andrew P. Griffith, agricultural economist at the University of Tennessee, points out the Feeder Cattle Index was as high as $381.86 June 24, gaining more than $10 in eight days. With last week’s decline, the Index was still about $10 higher than spot Aug Feeder Cattle futures.
“This means the actual participants in the cattle market think cattle are more valuable than those trading futures contracts, as the futures contract price is dominated by traders and not hedgers,” Griffith says. “The benefit of this positive basis is for those who are physically marketing cattle. Producers selling cattle today are being paid more than the futures market is suggesting they will be worth in the future.”
Conversely, Griffith explains the same fact makes managing price risk challenging for producers to utilize futures, options and LRP to manage price risk on cattle they intend to market days and weeks from today.