Cattle Current Daily—July 8, 2019

Cattle Current Daily—July 8, 2019

Negotiated cash fed cattle traded ended up steady in the Southern Plains at $109/cwt. on a live basis. It was $1-$2 higher at $113.00-$113.50 in Nebraska and at $112-$114 in the western Corn Belt. Dressed trade was steady to $2 higher at $180.

Through Thursday, the weighted average 5-Area Direct price for steers was 59¢ higher than the prior week at $111.17/cwt. on a live basis. The dressed price was 74¢ higher at $180.10.

Cattle futures closed sharply higher Friday, helped along by sluggish trade and higher cash fed cattle prices in the North.

Live Cattle futures closed an average of $1.18 higher (67¢ to $1.77 higher).

Feeder Cattle futures closed an average of $1.41 higher ($1.10 to $2.25 higher in spot Aug).

Wholesale beef values were weak to lower on light demand and moderate to heavy offerings, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $1.58 lower Friday afternoon at $217.67/cwt. Select was 56¢ lower at $194.80.

Corn futures closed fractionally higher to 2¢ higher through Jul ‘20, and then mostly unchanged to 2¢ lower.

Soybean futures closed mostly 10¢ to 14¢ lower.

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Major U.S. financial indices closed lower Friday. Popular thinking ascribed the pressure to a positive monthly employment report, which might make the Fed more reticent to cut interest rates.

Total non-farm payroll employment increased by 224,000 in June, according to the U.S. Bureau of Labor Statistics Employment Situation Summary. The unemployment rate was little changed at 3.7%.

Average hourly earnings in June of $27.90 was 6¢ more than the previous month. Average hourly earnings increased 3.1% over the past 12 months.

Earlier in the week, ADP National Employment report showed private sector, non-farm employment increasing by 102,000 in June, significantly less than the trade expected.

The Dow Jones Industrial Average closed 43 points lower. The S&P 500 closed 5 points lower. The NASDAQ was down 8 points.

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The Creighton University Rural Mainstreet Index  (RMI) rose 4.7 points in June to 53.2. That’s the sixth month out of seven the index was above growth neutral. The index ranges between 0 and 100 with 50.0 representing growth neutral, and an RMI below the growth neutral threshold. 50.0, indicating negative growth for the month.

The RMI is based on a monthly survey of bank CEOs in rural areas of a 10-state region dependent on agriculture and/or energy: Colorado, Illinois, Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota, South Dakota and Wyoming.

“Higher agriculture commodity prices and rebuilding from recent floods boosted the Rural Mainstreet Index (RMI) for the month. Furthermore, despite the negatives from the trade war, 69.4% of bankers support either raising, or continuing current tariffs,” said Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business. 

At the same time, more than one in four bank CEOs reported rising loan defaults due to farmer financial woes. Almost half of bankers reported that due to crisis-level farm income, farmers in their area have responded by selling the farm, or otherwise leaving the farm.

One of the notable quotes came from Jeff Bonnett, president of Havana National Bank in Havana, IL, who said there are estimates that 15-20 million corn acres were not planted nationwide.

“Based upon this information, corn prices should be in the range of $5.75 to $6.00/bu., or more. What are we missing? Will the true corn acres planted be revealed after the required certification through FSA due by July 15th?”

2019-07-07T13:12:23-05:00

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