Negotiated cash fed cattle trade was limited on light demand in all major cattle feeding regions through Friday afternoon, according to the Agricultural Marketing Service.
Live prices last week were $2-$3 higher in the Southern Plains at $122/cwt. and $3-$4 higher in the North at $124. Dressed prices were $4-$5 higher at $195.
Live Cattle futures closed higher Friday, regaining some of what was lost in the previous session, supported by higher cash prices and improving fundamentals.
Live Cattle futures closed an average of $1.00 higher (37¢ to $1.92 higher).
Resurgent grain futures prices pressured Feeder Cattle futures.
Feeder Cattle futures closed an average of $1.41 lower, from an average of (85¢ lower at the back to $2.37 lower at the front.
Choice boxed beef cutout value was $2.97 lower at $323.28/cwt. Select was $3.63 lower at $283.61.
Estimated total cattle slaughter for the week ending June 19 was 663,000 head, which was 2,000 head fewer than the previous week, but 17,000 head more than a year earlier, according to USDA. Year-to-date estimated total cattle slaughter of 15.4 million head is 820,000 more (+5.62%) than the same period last year. Total estimated beef production so far this year is 12.81 billion lbs., which is 772.6 million lbs. more (+6.42%).
Grain futures bounced back Friday from the previous day’s steep selloff, looking for the trading range encompassing the stronger U.S. dollar, weather risk, uncertainty about potential changes to the Renewable Fuel Standard and all of the rest.
Corn futures closed 22¢ to 34¢ higher through Jly ‘22 , and then mostly 14¢ to 17¢ higher.
Soybean futures closed mostly 54¢ to 66¢ higher.
Major U.S. financial indices sagged lower Friday, beneath the weight of investor worries about the Fed raising interest rates sooner than 2023.
The Dow Jones Industrial Average closed 533 points lower. The S&P 500 closed 55 points lower. The NASDAQ down 130 points.
“Strong grain prices, the Federal Reserve’s record-low interest rates, and growing exports have underpinned the Rural Mainstreet Economy. Even so, current rural economic activity remains below pre-pandemic levels,” says Ernie Goss, PhD, Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
Goss and Bill McQuillan, former chairman of the Independent Community Banks of America, created the monthly economic survey, which underpins the Creighton University Rural Mainstreet Index (RMI), covering 10 regional states, focusing on approximately 200 rural communities with an average population of 1,300. It gives the most current real-time analysis of the rural economy.
The June RMI remained above growth neutral for the seventh consecutive month at 70.0. The RMI was record high a month earlier at 78.8. The index ranges between 0 and 100 with a reading of 50.0 representing growth neutral.
The farmland price index was significantly above growth neutral for the ninth consecutive month; the first time since 2013. The June reading slipped to 75.9 from May’s 78.1.
The June farm equipment-sales index rose to 71.6 from 67.9, its highest level since 2012 and the seventh consecutive month of a reading above growth neutral.
Approximately, 46.7% of bank CEOs reported their local economy expanded between May and June, but several bankers raised future concerns.
For instance, according to Steve Simon, CEO of South Story Bank and Trust in Huxley, Iowa, “Continued dry conditions will start to have an effect on markets and crops soon.”
Longer term, Larry Winum, CEO of Glenwood State Bank in Glenwood, Iowa, says, “In my view, $29 trillion in total debt with no real plan to reduce that debt, or balance the annual budget is the biggest threat to our economy’s success.” He argues that neither political party, nor the Federal Reserve, has engaged in a serious discussion to solve the problem.
When asked to name the greatest threat to 2021-22 bank operations, approximately 25% cited a downturn in farm income. Another 25% pointed to rising government regulation.