Cattle futures extended gains Tuesday after a struggle for follow-through support from the bullish Cattle report and thoughts that packer interest will improve this week.
Live Cattle futures closed an average of 72¢ higher (28¢ to 90¢).
Feeder Cattle futures closed an average of 70¢ higher (55¢ to 93¢ higher).
Negotiated cash fed cattle trade ranged from limited on light demand to a standstill with too few transactions to trend, according to the Agricultural Marketing Service.
Last week, live prices were at $137/cwt. in the Texas Panhandle, at $136 in Kansas $137 in Nebraska and at $137-$139 in the western Corn Belt. Dressed trade was steady at $218.
Choice Boxed beef cutout value Tuesday afternoon was $4.96 lower at $285.44/cwt. Select was $3.05 lower at $280.22.
Corn futures closed 4¢ to 9¢ higher in the front six contracts.
Soybean futures closed 12¢ to 38¢ higher.
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Major U.S. financial indices closed Tuesday with the best three-day rally since 2020, as investors seemed to speculate the Federal Reserve will not stymie growth as it seeks to cool inflation.
The Dow Jones Industrial Average closed 273 points higher. The S&P 500 closed 31 points higher. The NASDAQ was up 106 points.
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Agricultural producer sentiment weakened in January as measured by the Purdue University/CME Group Ag Economy Barometer. The index declined 6 points from the previous month to 119, its second-lowest reading since July 2020. The Index of Current Conditions fell 13 points to a reading of 133, while the Index of Future Expectations was down 2 points to a reading of 112.
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 between Jan. 17-21, 2022.
“Rising farm input costs and ongoing supply chain disruptions appear to be contributing to producers’ weaker perception of current conditions and expectations of their farm’s financial performance in 2022 when compared to last year,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.
Disruptions in the supply chain for many farm inputs, coupled with strong demand, are pushing production costs higher. In January, 57% of survey respondents said they expect farm input prices to rise by 20% or more in 2022 and 34% of producers said they expect prices to rise by 30% or more.
Beyond higher prices, 28% of survey respondents said they have had difficulty purchasing crop inputs from suppliers for the 2022 season. In a follow-up question posed to those experiencing difficulty in procuring crop inputs, respondents reported difficulty in purchasing a broad spectrum of crop inputs including herbicides, insecticides, fertilizer, and farm machinery parts.