The previous session’s soft rally proved to be another false start as Cattle futures unraveled Wednesday with pressure from eroding Choice wholesale beef values and declining negotiated cash fed cattle prices.
Feeder Cattle futures closed an average of $5.36 lower.
Live Cattle futures closed an average of $3.79 lower ($3.07 to $5.42 lower).
Negotiated cash fed cattle trade ranged from moderate on moderate demand in Kansas to slow on light demand in all other regions, through Wednesday afternoon, according to the Agricultural Marketing Service.
So far this week, FOB live prices are $3-$4 lower in the Southern Plains at $171/cwt. Dressed delivered prices are $4 lower in Nebraska at $271.
Last week, dressed delivered prices were $174-$175 in Nebraska and $173-$175 in the western Corn Belt. Dressed delivered prices in the western Corn Belt were $274-$275.
Choice boxed beef cutout value was $3.19 lower Wednesday afternoon at $290.56/cwt. Select was 77¢ higher at $259.90/cwt.
Corn futures closed mostly 3¢ to 6¢ lower.
Kansas City Wheat futures closed 6¢ to 9¢ lower.
Soybean futures closed 10¢ to 14¢ lower through Aug ’25 and then 6¢ to 7¢ lower.
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Major U.S. financial indices declined Wednesday, fading early support forged by another indication of cooling inflation.
Private sector employment increased by 103,000 jobs in November and annual pay was up 5.6% year-over-year, according to the November ADP® National Employment Report™. Job-stayers saw a 5.6% pay increase in November, the slowest pace of gains since September 2021. Job-changers, too, saw slowing pay growth, posting pay gains of 8.3%, the smallest year-over-year increase since June 2021. The premium for switching jobs is at its smallest in three years of data.
“Restaurants and hotels were the biggest job creators during the post-pandemic recovery,” says Nela Richardson, ADP chief economist. “But that boost is behind us, and return to trend in leisure and hospitality suggests the economy as a whole will see more moderate hiring and wage growth in 2024.”
Dow 70 points lower. S&P 500 17 points lower and NASDAQ down 83 points.
WTI Crude oil futures on the CME closed $2.50 to $2.94 lower through the front six contracts.
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Global economic growth is set to remain modest, with the impact of the necessary monetary policy tightening, weak trade and lower business and consumer confidence being increasingly felt, according to the latest Economic Outlook from the Organization for Economic Cooperation and Development (OECD).
The Outlook projects global GDP growth at 2.9% this year, 2.7% next year and 3.0% in 2025. Asia is expected to continue to account for the bulk of global growth in 2024-25, as it has in 2023.
“The global economy continues to confront the challenges of both low growth and elevated inflation, with a mild slowdown next year, mainly as a result of the necessary monetary policy tightening over the past two years. Inflation has declined from last year’s peaks. We expect that inflation will be back at central bank targets by 2025 in most economies,” explains OECD Secretary-General Mathias Cormann. “Over the longer term, our projections show a significant rise in government debt, in part as a result of a further slowdown in growth…”
The OECD projects GDP growth in the United States at 2.4% this year, 1.5% in 2024 and 1.7% in 2025 as monetary policy is expected to ease.
In the euro area, which had been relatively hard hit by Russia’s war of aggression against Ukraine and the energy price shock, GDP growth is projected at 0.6% in 2023, before rising to 0.9% in 2024 and 1.5% in 2025, according to the OECD Outlook. China is expected to grow at a 5.2% rate this year, before growth drops to 4.7% in 2024 and 4.2% in 2025 on the back of ongoing stresses in the real estate sector and continued high household saving rates.