Cattle futures weakened Friday, with sharply lower week-end wholesale beef prices and wobbly negotiated cash fed cattle prices.
Live Cattle futures were an average of $2.05 lower. Feeder Cattle futures were an average of $4.74 lower.
Week to week on Friday, Live Cattle futures closed an average of 71¢ lower, except for 32¢ higher in near Dec. During the same period, Feeder Cattle futures were an average of $1.22 higher, except for an average of 56¢ lower in the front two contracts.
Negotiated cash fed cattle trade was mostly light on moderate to good demand in the North through Friday afternoon, according to the Agricultural Marketing Service.
Based on the last established prices for the week, FOB live prices were mainly steady to $2 lower in Nebraska at $220-222/cwt. and mostly unevenly steady to $2 lower in the western Corn Belt at mainly $219-$222. Dressed delivered prices were steady to $5 lower in Nebraska at mostly $345 and steady in the western Corn Belt at $345-$350.
The Texas Cattle Feeders Association reported its members trading fed cattle steady at $226.
Choice boxed beef cutout value was $2.60 lower Friday afternoon at $374.19/cwt. Select was $1.60 higher at $354.49. Week to week on Friday, Choice was $4.64 lower and Select was $1.27 lower.
Estimated total cattle slaughter of 548,000 last week was 64,000 head more than the previous week and 20,000 head fewer than the same week last year. Year-to-date estimated total cattle slaughter of 20.6 million head was 1.7 million head fewer (-7.5%) than the same time last year. Estimated year-to-date beef production of 18.3 billion pounds was 1 billion pounds less (-5.2%).
Grain and Soybean futures were lower on Friday.
Soybean futures were mostly 3¢ to 6¢ lower with hangover from disappointment in the trade talks between the U.S. and China and likely pressure from a more favorable harvest outlook.
Kansas City HRW Wheat futures were 1¢ to 3¢ lower through near-Sep.
Corn futures were mostly 2¢ to 5¢ lower through new-crop contracts with continued pressure from the higher stocks estimated in the USDA report published earlier in the week. Week to week on Friday, Corn futures closed 24’9¢ lower through the front six contracts.
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Major U.S. financial indices closed higher Friday, supported by a less robust national employment report than expected, leading some to think it reduces the odds of the Fed raising interest rates at its next meeting.
Non-farm payroll employment increased by 29,000 month to month in September, according to the U.S. Bureau of Labor Statistics. The unemployment rate rose slightly to 4.2%.
Average hourly earnings for all employees on private non-farm payrolls edged 5¢ higher in September to $37.81. Over the past 12 months, average hourly earnings have increased by 3.0%.
The Dow Jones Industrial Average closed 250 points higher. The S&P 500 closed 56 points higher. The NASDAQ was up 319 points.
West Texas Intermediate crude oil futures (CME) were $1.76 lower to 13¢ higher through the front six contracts.
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Trade tension and high input costs continue to weigh on rural economies, according to September’s Creighton University Rural Mainstreet Index. It declined to 44.7 from 50.3 in August, falling below growth neutral for the fourth time in the past six months. The index ranges between 0 and 100 with 50.0 representing growth neutral. The Rural Mainstreet Index is based on a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy.
“Pessimism from higher fuel and fertilizer costs exceeded the optimism stemming from higher grain prices, according to bankers across the 10-state region,” says Ernie Goss, the, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
Bankers were asked to identify input factors causing the greatest financial pressures among agricultural customers. Approximately, 52.6% of bankers named higher fertilizer costs, while the remaining 47.4% identified soaring fuel costs as the top factor producing financial pressure among agricultural producers.
Approximately, 79.0% of bankers reported that tariffs have a negative impact on the agriculture and livestock economy.
On the positive side, farm and ranchland prices were above growth neutral for the fourth time in the past five months, rising to 50.1 from 47.2 in August.
Bankers were asked to name the top buyer of farm and ranchland in their area. Overwhelmingly, 89.5% reported existing farmers as the number one customer in the sale of farm and ranchland, while the remaining 10.5% identified investors as the second-ranking purchaser of ag land.
Overall, however, rural bankers remain pessimistic about economic growth for their area over the next six months. The September economic confidence index tumbled to a weak 26.3 from 31.6 in August.
“Despite improving grain prices, rising trade tensions and higher input costs continued to weigh on banker confidence,” Goss emphasizes.