Soybean and corn futures gained Tuesday with stronger demand and bearish weather conditions in South America. Corn futures closed 3¢ to 9¢ higher. Soybean futures were up 7¢ to 28¢.
That weighed on Cattle futures once again, with Feeder Cattle an average of $2.26 lower and Live Cattle down an average of $1.21. So far today, they’re gaining some of that back.
Negotiated cash fed cattle prices continued mainly steady Tuesday with live prices at $138-$140/cwt. in Nebraska and dressed prices at $222, on moderate trade and demand, according to the Agricultural Marketing Service.
So far this week, live prices are steady in the Southern Plains at $138 and $140 in the western Corn Belt.
Choice Boxed beef cutout value was $3.49 higher Tuesday afternoon at $271.53/cwt. Select was $1.20 higher at $262.90.
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Major U.S. financial indices lost ground Tuesday. Federal Reserve Governor Lael Brainard spoke at a conference where she indicated the central bank is ready to implement additional tightening to tackle inflation. Brainard noted the effects of inflation are worse for working families, who spend proportionally much more of their income on basic necessities – up to 77% for lower income families.
The Dow Jones Industrial Average closed 281 points lower. The S&P 500 closed 58 points lower. The NASDAQ was down 328 points.
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Agricultural producer sentiment slipped last month, according to the Purdue University/CME Group Ag Economy Barometer. It was down 12 points from the previous month and 26% less year over year at 113. That was the lowest since March 2020.
The Index of current conditions was 19 points lower at 113; 44% less than a year earlier. The Index of Future Expectations was 9 points lower at 113, which was 31% less than the same time last year.
“Concern about the war’s impact on input prices and input availability on their farming operations was paramount in the minds of producers responding to the March survey and was a major factor in this month’s decline in sentiment,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.
The March survey provided the first opportunity to ask producers how they expect the war in Ukraine to affect U.S. agriculture. Producers overwhelmingly said they expect input prices to be most affected (63% of respondents), followed by crop prices (33% of respondents), and livestock prices (3% of respondents). Responding to a related question, 19% of respondents chose “availability of inputs” as their primary concern this year, which was equal to the percentage of producers who chose “lower crop and/or livestock prices” as their biggest concern.
Relative to input prices, 57% expect them to increase by 20% or more and 36% think input prices will rise by 30% or more. Just more than 25% say they’ve had difficulty purchasing crop inputs for the 2022 crop season. Producers report that supply chain problems persist across a wide range of inputs with herbicides, fertilizer, and farm machinery parts posing the most problems.
Agricultural Producers continue to say that they expect their operation’s financial performance to decline in 2022 compared to 2021. The March Farm Financial Performance Index, which asks producers whether they expect their farm’s financial performance in 2022 to be better than, worse than or about the same as in 2021, was up slightly (4 points) at a reading of 87, but remains 30% lower than a year earlier.
“When producers think about how their farm will fare financially in 2022, it’s clear they do not expect commodity price strength to offset the dramatic rise in farm production costs they are experiencing,” Mintert says.