Corn and Soybean futures bounced sharply higher Wednesday, fueled by the eroding crop conditions revealed in the weekly Crop Progress report and spawned by intensifying drought in the Corn Belt.
Corn futures closed mostly 20¢ to 31¢ higher through Sep ‘24 and then mostly 10¢ to 18¢ higher.
Soybean futures closed 23¢ to 37¢ higher through Aug ‘24 and then mostly 15¢ higher.
KC HRW Wheat closed mostly 27¢ to 37¢ higher.
Those gains cast a bearish shadow across Feeder Cattle futures, which closed an average of $3.67 lower ($2.92 to $4.42 lower).
Live Cattle faded most of the heat, supported by current cash premiums and despite lower cash fed cattle prices so far this week and recent sharp declines in wholesale beef values. Live Cattle closed an average of 34¢ lower, except for 12¢ and 5¢ higher in the front two contracts.
Keep in mind the monthly Cattle on Feed report comes out Friday.
Negotiated cash fed cattle trade ranged from limited on light demand to slow on light demand through Wednesday afternoon, according to the Agricultural Marketing Service.
So far this week, live prices are $2 lower in the Southern Plains at $180/cwt. and $2-$3 lower in the western Corn Belt at $184-$185, where dressed prices last week were $294-$300.
Although too few to trend, there were some live sales in Nebraska at $182-$185. Last week, live prices there were $185-$189 on a live basis and $296 in the beef.
Choice boxed beef cutout value was $2.66 lower Wednesday afternoon at $334.25/cwt. Select was $3.68 lower at $304.25/cwt.
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Major U.S. financial indices closed lower again Wednesday, pressured by hawkish interest rate comments from the Federal Reserve.
“Nearly all FOMC participants expect that it will be appropriate to raise interest rates somewhat further by the end of the year,” according to FOMC chair, Jerome Powell, in testimony to Congress. “But at last week’s meeting, considering how far and how fast we have moved, we judged it prudent to hold the target range steady to allow the Committee to assess additional information and its implications for monetary policy.”
The Dow Jones Industrial Average closed 102 points lower. The S&P 500 closed 23 points lower. The NASDAQ was down 165 points.
West Texas Intermediate Crude Oil futures (CME) closed $1.28 to $1.34 higher through the front six contracts.
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Rural economies are improving, according to the Creighton University Rural Mainstreet Index (RMI). It rose to 56.9 in June, the highest level since May of last year and marking the third consecutive month with a reading above growth neutral (50.0).
“After negative growth during the first quarter of this year, the Rural Mainstreet economy experienced positive, but slow, economic growth for all of the second quarter. Only 3.4% of bankers reported a downturn in economic conditions for the month,” according to Ernie Goss, the Jack A. MacAllister Chair in Regional Economics at Creighton University’s Heider College of Business.
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.
Bank CEOs ranked Federal Reserve rate hikes as the greatest challenge in the 12 months ahead with rising bank regulations ranked as a distant second.
“Higher short-term interest rates produced by Federal Reserve rate hikes over the past year have posed a significant threat to community banks by expanding the costs of customer deposits while the rates on bank loans have risen little over the same time period,” Goss says.