Brief market recaps this week. We discuss local auction volume and prices and a recap of the Jobs report out of the U.S Department of Labor.
Crops
At market open on Friday, the overall week in futures for crops was mixed. The shortened week saw declines in the price of KC July ’20 Wheat, mixed movement on Chicago November ’19 Beans (which broke below the 9-day moving average technical support), and declines in Chicago December ’19 Corn. Cotton was the one Texas High Plains staple crop that showed strength over the week. ICE Dec ’19 Cotton rose over 2% on the week, following some deescalation in the U.S./China trade dispute. The U.S. and China are expected to resume talks in October.
Weather is providing some bearish input for the corn market. Weather conditions look favorable over the next two weeks. Overall, we expect little movement until the release of next Thursday’s WASDE and Crop Production reports. The only two things in the near future that we could expect to drive a fundamental price change would be a major trade agreement (China, Japan, etc.) or new production information via these USDA reports.
Livestock
Nearby cattle contracts remain weak since the fire in Holcomb. Both the October ’19 fat and feeder contracts appear to be trading along the 9-day moving average boundary. For the last two days the feeder cattle contract appears to have tested the 20-day moving average barrier, and fallen short. The contract opened lower today and continued declining. At time of writing the contract was trading around $130.85/cwt.
Local auction prices ranged from $110/cwt for #1 Feeder Steers heavier than 800 lbs. to almost $170/cwt in Amarillo for #1 Feeder Steers in Amarillo. The average for the Texas High Plains for steers greater than 800 lbs. was $110/cwt. Average price for steers below 500 lbs. was $159/cwt. The largest category of sales for #1 Feeder Steers, 700-800 lbs. which accounted for 890 of the 1,128 sold averaged $131/cwt across the Texas High Plains.
Jobs
During the continued forecasts of economic slowdown over the month of August one sector of the economy appeared to hold steady; consumers, i.e. all of us. Overall consumer purchasing drove much of the economy over the last few months while other sectors like manufacturing showed signs of a slowdown.
Enter the August Jobs report from the U.S. Department of Labor. After repeated trade war escalations, comments from members of the Federal Reserve offering cautious economic outlooks, and associated stock market volatility, the August Jobs report has been seen in many circles as a significant indicator of whether or not the economy actually slowed down during the month of August.
The report was released at 8:30 AM ET, and disclosed mixed information. On the one hand, jobs increased; 130,000 jobs were added in the month of August. However that number is below the previous month, July, in which the U.S. added 164,000 jobs, indicating sustained growth, but at a slower pace. This makes August the third lowest months for jobs added this year, behind January (56,000) and May (62,000). Unemployment remained steady at 3.7%, still circling the 50-year low.
The S&P 500 fell below its previous close quickly after the opening bell. The DJIA followed suit, holding slightly above its previous close for the first hour of trading.
Upcoming Dates
September 9 – Crop Progress, NASS
September 9 – Hemphill County Mini Ag Conference – Canadian TX; Current Issues in Livestock and Meat
September 10 – Carson County Producers Meeting – Panhandle, TX
September 12 – WASDE, ERS
September 20 – Cattle on Feed, NASS
September 20 – Dairy Margin Coverage Signup Deadline
January – Expected Tyson Holcomb plant reopening