Cattle futures finally bounced higher Thursday, supported by oversold conditions and some renewed strength in cash prices.
Toward the close, Live Cattle futures were an average of $3.32 higher. Feeder Cattle futures were an average of $6.50 higher.
Negotiated cash fed cattle was light on light demand in Nebraska and the western Corn Belt through Thursday afternoon, according to the Agricultural Marketing Service. So far this week, FOB live prices are $218/cwt. and dressed delivered prices are $345. There is no established trade in the Southern Plains.
Choice boxed beef cutout value was $1.88 lower Thursday afternoon at $376.90/cwt. Select was $2.86 lower at $350.72.
Corn and Kansas City Wheat futures were lower on Thursday with likely profit taking and positioning ahead of the three-day weekend.
Toward the close and through the front four contracts, Corn futures were 3¢ to 4¢ lower. Kansas City HRW Wheat futures were 11¢ to 22¢ lower. However, Soybean futures were 1¢ lower to 5¢ higher, supported by export sales.
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Major U.S. financial indices closed higher Thursday, as Treasury yields declined.
The Dow Jones Industrial Average closed 624 points higher. The S&P 500 closed 81 points higher. The NASDAQ was up 366 points.
Through mid-afternoon, West Texas Intermediate Crude Oil futures (CME) were 52¢ lower to 66¢ higher through the front six contracts.
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Rural economic conditions improved slightly last month, according to the Creighton University Rural Mainstreet Index (RMI), which is based on a survey of bank CEOs in a 10-state region dependent on agriculture and/or energy.
The overall index increased from 42.1 in July to 50.3 in August, rising above growth neutral for the second time in the last six months. The index ranges between 0 and 100 with 50.0 representing growth neutral.
“Despite higher input costs and improved, but still relatively weak grain prices, bank CEOs rated approximately 52.5% of farm borrowers in good condition with the remaining 47.5% rated in fair condition,” says Ernie Goss, the, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
Increasingly dry conditions in some areas are also applying pressure on some cattle producers.
“We have a good percentage of cattle ranchers which is helping to support our ag lending operation. However, the increasing drought in Western South Dakota, Wyoming and Montana has made some or our borrowers start to liquidate their herds,” according to Todd Douglas, CEO of First National Bank in Pierre, S.D.
Approximately, 47.5% of bankers expect farm income to decline in the next 12 months. Roughly 36.8% anticipate little or no change in farm income, while the remaining 15.7% expect a slight increase in farm income over the 12-month period.
Rural bankers remain pessimistic about economic growth for their area over the next six months. The August economic confidence index slumped to 31.6 from July’s 34.2.
“Weak grain prices, higher input costs and volatility stemming from the Iran war and tariff uncertainty continue to weigh on banker confidence,” Goss says.