Cattle futures continued to carve a sharp path lower Friday, as equity markets unwound with growing concerns of recession.
Live Cattle futures closed an average of $2.02 lower. Feeder Cattle futures closed average of $4.15 lower.
Negotiated cash fed cattle trade ranged from moderate on moderate demand to inactive on light demand through Friday afternoon, according to the Agricultural Marketing Service.
For the week, FOB live prices were $2 lower in the Texas Panhandle at $188/cwt., $2 lower to $7 higher in Kansas at $188-$195, $2 lower in Nebraska at $196 and $2 lower in the western Corn Belt at $194-$196. Dressed delivered prices were $2 lower at $310/cwt.
Choice boxed beef cutout value was 98¢ higher Friday afternoon at $313.77/cwt. Select was 29¢ lower at $297.17/cwt.
Short covering on profit taking earlier in the week helped Grain and Soybean futures close higher Friday. Corn futures closed 4¢ to 5¢ higher. Soybean futures closed mostly 10¢ to 12¢ higher. KC HRW Wheat futures closed 5¢ to 7¢ higher.
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Major U.S. financial indices continued sharply lower amid recession fears.
Nonfarm payroll employment increased by 114,000 in July, according to the U.S. Bureau of Labor Statistics. That was significantly less than expected. Average hourly earnings for all employees on private nonfarm payrolls increased by 8¢ in July to $35.07. Over the past 12 months, average hourly earnings have increased by 3.6%.
The Dow Jones Industrial Average closed 494 points lower. The S&P 500 closed 100 points lower. The NASDAQ was down 417 points.
West Texas Intermediate Crude Oil futures on the CME were $2.79 to $2.81 lower through the front six contracts.
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Overall, domestic consumer beef demand remains strong, says Andrew P. Griffith, agricultural economist at the University of Tennessee, in his latest weekly market comments.
“The late summer and early fall will give the market an idea if consumers are going to continue spending discretionary dollars on beef at the elevated retail price level,” Griffith says. “Some would argue consumers are slowing down, but where they are getting that data is lost on me. That is not to say the market will not slow down, but at this point, I cannot point to the data that says it is.”
On the other side of the gate, Griffith notes the leverage feedlots are using to keep negotiated cash fed cattle prices propped higher despite seasonal tendencies.
“There will continue to be downside price risk the next two or three months, but such risk is beginning to look less daunting as time passes,” Griffith says. “There have certainly been a few hiccups that may strike a chord of fear, but it will dissipate. Cattle feeders have leverage and will maintain leverage due to reduced cattle availability.”