Cattle Current Daily—Jan. 4, 2023

Cattle Current Daily—Jan. 4, 2023

Cattle futures closed lower Tuesday, in correction mode after the long holiday weekend, and with softer outside markets.

Live Cattle futures closed an average of 66¢ lower (5¢ lower near the back to $1.05 lower in new spot Feb), not counting newly minted away Jun.

Feeder Cattle futures closed an average of 55¢ lower, from 7¢ lower at the back to $1.45 lower toward the front.

That was despite last week’s stronger cash fed cattle prices and persistent increases in wholesale beef prices.

Last week, live prices were $1 higher in the Southern Plains at $157/cwt., $1-$2 higher in Nebraska at $158 and steady to $3 higher in the western Corn Belt at $157-$160. Dressed prices were $3 higher in Nebraska at $252 and $2-$3 higher in the western Corn Belt at $250-$252. Negotiated cash fed cattle trade was at a standstill through Tuesday afternoon, according to the Agricultural Marketing Service.

Choice boxed beef cutout value was $4.97 higher Tuesday afternoon at $286.95/cwt. Select was $3.70 higher at $254.63/cwt.

Corn and grain futures closed sharply lower in nearby contracts amid the overall risk-off atmosphere of the day, as well as positive rains in South America.

Corn futures closed 3¢ to 8¢ lower through Jly ‘24 and then mostly 2¢ to 4¢ higher.

Soybean futures closed 23¢ to 32¢ lower through Sep ‘23 and then mostly 4¢ to 5¢ lower.

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Major U.S. financial indices closed slightly lower Tuesday, but the market had a more bearish feel as investors size up inflation and the risk of recession.

The Dow Jones Industrial Average closed 10 points lower. The S&P 500 closed 15 points lower. The NASDAQ was down 79 points.

West Texas Intermediate Crude Oil futures (CME) closed $2.84 to $3.33 lower through the front six contracts.

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Agricultural producer sentiment rebounded in December, as measured by the Purdue University/ CME Group Ag Economy Barometer. It climbed 24 points month to month to 126 following two months of decline.

The Current Conditions Index jumped 37 points to a reading of 135, while the Future Expectations Index increased 18 points to a reading of 122.

“The improvement in current sentiment was motivated by producers’ stronger perception of current financial conditions on their farms and could be attributed to producers taking time to estimate their farms’ 2022 income following the completion of the fall harvest,” says James Mintert, the barometer’s principal investigator and director of Purdue University’s Center for Commercial Agriculture.

The Farm Financial Performance Index climbed 18 points to a reading of 109 in December, the only time in it was above 100 in 2022. The turnaround was driven by a sharp increase in the percentage of producers who expect better performance than the previous year.

Looking to the year ahead, the December survey asked producers to compare their expectations for their farm’s financial performance in 2023 to 2022. Producers indicated they expect lower financial performance in 2023 and cited rising costs and narrowing margins as key reasons. Concerns about costs continue to be top of mind for producers. Nearly half (47%) of crop producers said they expect farmland cash rental rates in 2023 to rise above the previous year. Other top concerns for 2023 include higher input costs (45% of respondents), rising interest rates (22% of respondents) and lower crop or livestock prices (13% of respondents).

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 December 5-9.

2023-01-03T19:36:06-06:00

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