Cattle futures took a breather Tuesday amid light trade as traders await weekly cash direction.
Feeder Cattle futures closed an average of 69¢ lower.
Live Cattle futures closed an average of 67¢ lower.
Negotiated cash fed cattle trade was limited on light demand in Kansas through Tuesday afternoon, according to the Agricultural Marketing Service. Although too few to trend, there were some early live sales at $159/cwt. Elsewhere, trade ranged from mostly inactive on very light demand to a standstill.
Last week, live prices were $158/cwt. in the Texas Panhandle, $158-$159 in Kansas, $155-$159 in Nebraska and $154-$160 in the western Corn Belt. Dressed prices were $250.
Choice boxed beef cutout value was 15¢ higher Tuesday afternoon at $266.72/cwt. Select was $3.61 higher at $257.33/cwt.
Grain and Soybean futures Tuesday likely reflected some positioning ahead of Wednesday monthly World Agricultural Supply and Demand Estimates.
Corn futures closed 2¢ to 5¢ lower.
KC HRW Wheat closed 3¢ to 9¢ higher through May ‘24, and then mostly fractionally higher.
Soybean futures closed 1¢ to 6¢ lower through Aug ‘23 and then mostly 1¢ to 3¢ higher.
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Major U.S. financial indices rebounded Tuesday, apparently fueled by dovish comments from Federal Reserve Chair Jerome Powell at The Economics Club of Washington, D.C. His comments underscored the notion that inflation is easing and that it could be a year or more before inflation meets the target of federal monetary policy.
The Dow Jones Industrial Average closed 265 points higher. The S&P 500 closed 52 points higher. The NASDAQ was up 226 points.
West Texas Intermediate Crude Oil futures (CME) closed $2.52 to $3.03 higher through the front six contracts.
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Agricultural producer sentiment improved for the second consecutive month in January, as measured by the Purdue University/CME Group Ag Economy Barometer.
The Ag Economy Barometer increased 4 points from December to January, rising to 130. The increase was primarily due to better expectations for the future as the Future Expectations Index improved by 5 points to 127. The Index of Current Conditions rose 1 point to a reading of 136.
“Although producers were a bit more optimistic about the future this month, they again reported expectations for tighter margins in 2023 than in 2022,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.
Each January, starting in 2020, the survey asks respondents if they expect to have a larger operating loan compared to the previous year and if so, the reason for the larger loan. In January, 22% of respondents said they expect to have a larger 2023 farm operating loan compared to 2022, down from 27% last year. Among respondents who expect to have a larger operating loan, 80% indicated it was due to increased input costs. Only 5% said it was due to carrying over unpaid operating debt, significantly fewer than 13% a year earlier and 20% in January 2021.
“The sharp decline in the percentage of producers expecting to carry over unpaid operating debt is important,” Mintert says. “It supports the idea that the vast majority of producers are entering 2023 in a strong financial position despite the rise in production costs.”
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 from January 16-20.