Cattle futures and some other ag commodities lost ground Tuesday with much of the pressure apparently tied to recessionary fears in outside markets. The recent sharp decline in wholesale beef prices didn’t help.
Feeder Cattle futures closed an average of $2.08 lower ($1.75 to $2.25 lower).
Live Cattle futures closed an average of $1.69 lower ($1.32 to $2.20 lower).
Corn futures closed mostly 1¢ to 3¢ lower.
Soybean futures closed 14¢ to 17¢ higher through Aug ‘23 and then mostly 4¢ to 6¢ higher.
Negotiated cash fed cattle trade ranged from mostly inactive on very light demand to a standstill through Tuesday afternoon, according to the Agricultural Marketing Service.
Last week, live prices were at $155/cwt. in the Southern Plains, $157 in Nebraska, $157 in Colorado and $157-$158 in the western Corn Belt. Dressed prices were $248-$249.
Choice Boxed beef cutout value was 66¢ lower Tuesday afternoon at $242.65/cwt. Select was $1.97 lower at $219.14/cwt.
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Major U.S. financial indices closed sharply lower again Tuesday as investors seemed to grow increasingly concerned about the threat of a recession as the Fed tries to rein back inflation.
The Dow Jones Industrial Average closed 350 points lower. The S&P 500 closed 57 points lower. The NASDAQ was down 225 points.
West Texas Intermediate Crude Oil futures (CME) closed $2.48 to $2.68 lower through the front six contracts.
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Agricultural producer sentiment was static month to month, according to the latest Purdue University/CME Group Ag Economy Barometer. The index in November was unchanged from the prior month at 102. However, the Current Conditions Index declined 3 points to a reading of 98 while the Future Expectations Index increased 2 points to a reading of 104.
“Even though sentiment remained relatively unchanged in November, producers are continuing to look at their bottom line,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture. “Rising interest rates combined with high input and energy costs are creating a lot of uncertainty at the farm level.”
The Farm Financial Performance Index improved modestly, up 5 points from October to 91, but it remains 14% lower year over year. Nearly a third of producers continue to express concern that their farms’ financial performance this year will be worse than the prior year. But the remainder expect their farms’ 2022 financial performance to be equal to or exceed 2021’s. Still, high input costs continue to weigh on producers’ minds with 42% of respondents in this month’s survey citing that as their top concern in the year ahead. Other concerns include rising interest rates, input availability and declining commodity prices.
Given the sharp rise in energy prices this year, the latest survey asked producers how they’ve responded to the cost increase. Just over a fourth (27%) of this month’s respondents indicated they’ve made changes in their operation because of rising prices for energy. Of those who indicated they made changes, 33% indicated they reduced tillage, 24% reduced nitrogen rates and/or changed application timing, 11% increased their use of no-till, and 8% said they reduced crop drying.
The Ag Economy Barometer is calculated each month from 400 U.S. agricultural producers’ responses to a telephone survey. This month’s survey was conducted after the U.S. mid-term elections from November 14-18.