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Interest rates are up a bit for operating loans. According to the Federal Reserve Bank of Kansas City, the slight increase is still historically low for the first half of the year.

The average rate on non-real estate loans was about 30 basis points higher than the all-time low of 2020. In contrast, the average rates on farm real estate loans continued a decline, marking another historic low.

Rates are also low at commercial banks, while smaller lenders continue to provide similar accommodations.

The Fed’s report says despite the increase in rates for operating loans, the low interest rate environment and muted demand for ag lending suggest interest expenses are relatively low.

Profitability in the sector also continued to be supported by strong prices for major commodities.

African swine fever cases appear in farm pigs in Germany

The first cases of African swine fever in domestic hogs were found in Germany this week. The disease was on two small farms in the same location where more than 1,200 cases appeared in wild boar. It likely won’t have an impact on the country’s pork market because many of Germany’s exports are banned from most non-European Union countries.

U.S. corn and soybean exports are down

As of the week ending July 8, the Department of Agriculture says corn and soybean commodities plunged, while wheat sales rose. Corn sales were at 138,000 metric tons, 20 percent less than the week before. Soybean sales were down 66 percent to just 21,000 metric tons. Wheat sales, however, jumped 46 percent with “unknown countries” as the top buyer.

A look at the markets

Markets are starting the week off mixed. Analyst Jamey Kohake has more:

“Starting off in corn and beans, kind of an erratic trade. We had a gap higher starting Sunday night and had a nice rally going pretty much based off the two-week weather forecast to be getting warmer and warmer and dry for the next ten days and putting some weather premium back into the market, but once we got into the day session everything fizzled out and this really is a macro selloff. We’re seeing Dow Jones futures down close to 800 this morning, the U.S. dollar is higher, metal is lower, energies are down big, crude oil down about $5 a barrel. Pretty much all based on the delta variant spreading. But it’s all based on the weather here right now. Can we separate ourselves from outside noise. 

“Over to the meat market, just risk off type trade based on fears of long term demand softening up cattle cash trade last week 120-123 I look for that to hang in that same range again, close to 120 still look for boxes to trend on lower this week. Hogs not much follow through as broad based selling there, I do look for hogs to stabilize this week and accelerate back to the upside here and put a couple dollars higher near the end of the week. But other than that, just macro selling and stabilization and get the fear of COVID back out of the market again.”

Colfax auction

The Colfax sheep and goat auction on Saturday saw a sale of 715 head of sheep. Feeder lambs fetched the day’s high average price of $2.42 per pound, while fed lambs averaged $2.65 per pound. There were 130 head of goats at the auction, which saw a high average price ranging from $120 to $630 per head.

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