Cattle futures closed narrowly mixed as traders appeared to wait for the week’s cash direction and looking toward Friday’s monthly Cattle on Feed report.
Live Cattle narrowly mixed, from an average of 38¢ lower in the front four contracts to an average of 21¢ higher.
Feeder Cattle futures closed narrowly mixed, from an average of 25¢ lower in the front three contracts to an average of 70¢ higher (10¢ to $1.07 higher).
Negotiated cash fed cattle trade was at a standstill in all major cattle feeding regions through Tuesday afternoon.
Last week, FOB live prices were $186/cwt. in the Southern Plains, $187-$188 in Nebraska and $187-$189 in the western Corn Belt. Dressed delivered prices were $295-$300 in Nebraska and $298 in the western Corn Belt.
Choice boxed beef cutout value was 11¢ lower Tuesday afternoon at $313.22/cwt. Select was 13¢ higher at $303.18/cwt.
Grain futures firmed Tuesday.
Corn futures closed 1¢ to 3¢ higher.
KC HRW Wheat futures closed 7¢ to 9¢ higher.
Soybean futures closed mostly 1¢ higher., except for fractionally higher to 2¢ lower in the front five contracts.
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Major U.S. financial indices closed higher Tuesday.
The Dow Jones Industrial Average closed 320 points higher. The S&P 500 closed 29 points higher. The NASDAQ was up 63 points.
West Texas Intermediate Crude Oil futures (CME) closed 35¢ to 75¢ higher through the front six contracts.
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As key commodity prices tumble, farm income this year will be the lowest since 2020, following record-high levels in 2022, according to the recent annual agricultural market baseline outlook from the Food and Agricultural Policy Research Institute at the University of Missouri (FAPRI).
Even so, FAPRI director Pat Westhoff notes, “Despite a $30 billion drop in net farm income from 2022 to 2023, and another large projected decline in 2024, net farm income remains above annual levels from 2015 to 2020.”
“Our projections indicate that after near-record prices for several crops in the 2022-23 market year, we can expect a retreat,” says Bob Maltsbarger, FAPRI research economist. “In 2023, we saw crops overcome challenging growing conditions and achieve significant production levels that caused a decline in prices. Another year of trend-line yields, and shifting of planted acreage for key crops, could continue the downward trend of prices.”
The FAPRI outlook provides projections for agricultural and biofuel markets and serves as a point of reference for evaluating alternative scenarios for food and agricultural policy. It offers a summary of 10-year “baseline” projections for several economic indicators, including farm income, farm program spending and domestic commodity markets.
“FAPRI’s spring baseline, and subsequent updates, offer an understanding of the challenges and opportunities facing agricultural markets,” Westhoff says. “As producers and policymakers evaluate volatile market conditions, the analyses and projections we’ve shared can aid in risk mitigation.”
Among other FAPRI outlook findings…
- Lower prices for farm inputs, such as fertilizer, partially offset lower prices but don’t offer enough relief to avoid declines in farmers’ net returns.
- Livestock producers can expect reduced feed costs due to lower corn and soybean prices, offsetting price and demand challenges faced in this sector.
Cattle prices have been strengthened by drought and other factors and an upward trend is projected for 2024 and 2025.
- Demand-driven price declines for hogs, poultry and milk are expected to continue in 2023 and 2024.
- For consumers, food price inflation slowed in 2023, and FAPRI’s report suggests that this trend could continue in 2024. The consumer price index for food is anticipated increase 2.1% in 2024, with the lion’s share of the increase coming from food away from home.