Cattle Current Daily—Dec. 30, 2021

Cattle Current Daily—Dec. 30, 2021

Negotiated cash fed cattle trade was limited on light demand in Nebraska and the western Corn Belt through Wednesday afternoon, with too few transactions to trend, according to the Agricultural Marketing Service. So far this week live prices in those regions are at $140/cwt., which is $5 higher in Nebraska and $2 higher in the western Corn Belt. Dressed prices of $220-$222 are $3-$4 higher in Nebraska and $3-$5 higher in the western Corn Belt.

Trade in the Southern Plains was at a standstill. Live prices there last were $135.

Cattle futures, especially Feeder Cattle, climbed higher Wednesday, buoyed by cash market gains and higher wholesale beef prices.

Feeder Cattle futures closed an average of $1.79 higher (97¢ to $2.82 higher with most strength in the front months).

Live Cattle futures closed an average of $1.01 higher (65¢ higher to $1.37 higher).

Choice boxed beef cutout value was $1.05 higher Wednesday afternoon at $265.71/cwt. Select was $1.00 higher at $257.09/cwt.

Corn futures closed mostly 2¢ to 4¢ higher after fractionally mixed in the front three contracts. 

Soybean futures closed mostly 2¢ to 8¢ higher through Jan ‘23 and then 6¢ to 13¢ higher.

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Major U.S. financial indices closed narrowly mixed again Wednesday with holiday-lightened trade and little news to shove it one direction or the other.

The Dow Jones Industrial Average closed 90 points higher. The S&P 500 closed 6 points higher. The NASDAQ was down 15 points.

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Creighton University’s Rural Mainstreet Index (RMI) remained above growth neutral in December for the 12th consecutive month.

“Solid grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy. USDA data show that 2021 year-to-date agriculture exports are more than 20.7% above the same period in 2020. This has been an important factor supporting the Rural Mainstreet economy,” says Ernie Goss, Ph.D., Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.

The RMI stems from a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy. It slipped one point month to month in December to 66.7. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.

“Seven of 10 bankers described their local economy as expanding, while only 6.7% indicated that their local economy was in a modest economic downturn,” says Goss.

More specifically, Todd Douglas, CEO of First National Bank in Pierre, South Dakota, explains, “With the paycheck protection program (PPP) monies, and good commodity prices, even with some areas of reduced yields due to lack of moisture, agriculture borrowers should be in good shape for 2022.”

The region’s farmland price index rose to a record high of 90.0 in December, up from 85.5 in October. The index has been above growth neutral for 15 consecutive months. Bank CEOs say annual cash rents for non-irrigated, non-pasture farmland soared to $262 from $218 one month prior to the pandemic in February 2020.

Jeff Bonnett, CEO of Havana State Bank in Havana Illinois, cautions, “Inflation is real and affecting folks in our service areas.”

“Yields and prices ended being up over projections for 2021 but it appears land costs and all crop inputs will be up significantly in 2022,” says Steve Simon, CEO of South Story Bank & Trust in Huxley, Iowa.

2021-12-29T18:30:43-06:00

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